TheChek News Flow

An intense battle may now erupt over who has the right to regulate — or deregulate — technology

There was no mistaking the mood in the Senate room in Washington last Thursday as politicians and tech bosses debated artificial intelligence. The consensus was that it was essential for the US to deregulate and accelerate investment in order to outrun China in the latest technological arms race. Europe, meanwhile, was ridiculed as an AI also-ran having hobbled itself with “stifling” regulations.

Lobbing a softball to the tech executives, Republican Senator Ted Cruz asked: how harmful would it be if the US followed the EU in creating a heavy-handed regulatory process for AI? “I think that would be disastrous,” replied OpenAI’s chief executive, Sam Altman.

Deregulation and acceleration may be the watchwords in Washington after President Donald Trump tore up his predecessor’s sweeping executive order on AI. Republicans later trumpeted almost $1tn of promised investment in the sector. But that worldview is evidently not shared across the nation. Thirty-one US states passed resolutions or laws on AI last year, according to the National Conference of State Legislatures, covering harms, such as the use of deepfakes in elections, employment discrimination and lack of consumer protection. This year, the NCSL has flagged a further 550 AI-related bills that have been introduced in 45 states.

Most of these initiatives will fail, as happened to California’s landmark AI bill last year, but a few may well pass. Left unchecked, that could result in the US having “a web of inconsistent laws that fragment national policy, delay innovation, and create legal and technical barriers to scaling AI systems across state lines”, warns Daniel Castro, director of the Center for Data Innovation. When it comes to tech regulation, it seems, the US might end up more “European” than Europe.

That fear prompted House Republicans this week to push a legislative amendment that would roll back state AI laws and impose a moratorium on any new ones for a decade. The move was condemned by state representatives and the AI researcher Gary Marcus. “A decade of deregulation isn’t a path forward. It’s an abdication of responsibility,” they wrote in an open letter.

Opposition politicians also highlighted the hypocrisy of revering states’ rights when regulating women’s bodies but abandoning them when protecting consumers from powerful tech interests. An intense battle may now erupt between Washington and the states over who has the right to regulate — or deregulate — technology.

At the state level, there is “incredible momentum” to fill the regulatory vacuum created by Washington’s inaction, according to Amba Kak, executive director of the AI Now Institute. States are determined to tackle the most “abhorrent, harmful and problematic” use cases of AI, she says. “In today’s world, they’re the only people who can push this regulatory agenda forward. I think the states very much see a gap, and a moment, for them to step up to the plate,” she tells me.

However, fragmented AI-related state legislation affecting data privacy rights and autonomous cars, for example, can cause real complications for many companies. That is particularly true in some traditional sectors, such as financial services and medicine, that are wary of adopting AI services because of a lack of trust in untested AI systems and no clear mitigation, says Rumman Chowdhury, co-founder of non-profit Humane Intelligence and a former Biden administration official. “Regulation doesn’t stifle innovation. Regulation enables it,” she tells me, noting there is often a “trickle up” effect from the states to the federal level.

That suggests that the regulatory activism by states might yet force Washington to move, especially seeing that some members of the Maga crowd support a more interventionist approach. “Right now a nail salon in Washington DC has more regulations than these four guys running wild on AI. We have no earthly idea what is going on,” the former Trump aide Steve Bannon told the FT Weekend Festival in DC. “I think we ought to have tremendous regulations on AI.”

Even the anti-regulation evangelist Cruz accepts the necessity to act in certain cases. With the Democratic senator Amy Klobuchar, he co-sponsored the recent bipartisan Take It Down Act criminalising the sharing of AI-generated sexual abuse material. That legislation was also supported by first lady Melania Trump. There may be many strange alliances and unpredictable zigzags along the way, but regulation is coming for AI — even in the US.

Tariff policies could cause ‘enormous’ damage, $73bn firm says in letter to investors

Donald Trump’s trade war risks sparking capital flight from the US as the president’s unpredictable tariff policies cause “enormous” damage, hedge fund Elliott Management has warned.

The activist firm, founded and co-led by Republican megadonor Paul Singer, said in a letter to investors seen by the Financial Times that the Trump administration’s economic programme could tarnish the appeal of the dollar and of doing business in the US.

That would risk “capital flight” and a “significant” fall in value of the currency and US assets, Elliott said in a section of the late April letter titled “Bonfire of the American era?”

Elliott declined to comment.

The warning comes after Trump’s tariff blitz triggered weeks of turmoil in financial markets, and marks the latest criticism of the White House from the $73bn-in-assets hedge fund, which earlier this year said the president’s embrace of cryptocurrencies was fuelling a speculative mania.

The tariffs contemplated by the administration were “likely more stringent than the ones that exacerbated the Great Depression in the 1930s”, Elliott wrote in the letter, which was sent to investors after Trump announced a 90-day pause to his sweeping “reciprocal” tariffs on US trading partners last month, but before this week’s US-China trade deal fuelled a further recovery in markets.

“Such tariffs will generate a lengthy, complicated process of negotiation, retaliation and uncertainty for businesses around the globe” that could cause “enormous” damage, the firm added.

Singer has been a major donor to Republicans in recent years, donating $56mn to the party’s candidates in the last election cycle, according to website OpenSecrets.

A small group of top Wall Street figures have spoken out against Trump’s economic policies. Citadel founder Ken Griffin, another major Republican donor, said last year that the president’s tariff plans would put the US “on a slippery slope to crony capitalism”. Bill Ackman, a supporter of Trump in the 2024 presidential campaign, has described the tariffs as “a major policy error”, while billionaire investor Stanley Druckenmiller has said he does not support tariffs exceeding 10 per cent.

Elliott also said in the letter that the sell-off that followed Trump’s “liberation day” tariff announcements caused “capital destruction on a large scale”.

The S&P 500 index was down by as much as 15 per cent in 2025 in early April, but has since recovered all of those losses as trade tensions receded.

Nevertheless, Elliott said the episode highlighted the “brittleness” of a “massively overvalued stock market”.

The hedge fund was up about 2.5 per cent in the first quarter of the year, according to figures in the letter. The turmoil sparked by tariffs was likely to create greater opportunities for activist investing, as market stress “exposes weakness at companies in need of course correction”, the firm added.

Newcomers are tearing up conventions and launching faster, condensed games aimed at younger online audiences

Most fans would understand a football match to be played by two teams of 11 over 90 minutes. But famous players, influencers and venture capitalists are tearing apart conventions with shorter format competitions tailored to younger fans who follow the action online.

Kings League, a seven-a-side men’s series founded by former FC Barcelona captain Gerard Piqué, and the six-versus-six Baller League, which started in Germany and recently launched in the UK, have attracted retired football stars and millions of viewers. World Sevens Football (W7F), a women’s competition, debuts in Portugal from May 21-23, offering a $5mn prize fund.

These leagues present a faster, more condensed version of the game on smaller pitches, designed for digital platforms. Djamel Agaoua, chief executive of Kings League, says that younger fans have less patience for nil-nil draws.

“If for three, four, five minutes nothing is happening, they swipe up,” he says. “Consumption habits, because of social media, have changed a lot.”

Kings League, which was founded in 2022 and held its first season the following year, has expanded from Spain to Brazil, France, Germany, Mexico and Italy. Queens League, the women’s equivalent, operates in Spain. Baller League, which started in Germany, now holds matches at London’s Copper Box Arena, and plans to launch in the US later this year.

Amazon’s Twitch and Google’s YouTube are critical to the reach of live matches and target younger audiences. Last year, consultancy PwC warned that sports executives and investors “should take heed” of new viewing habits among Gen Z and younger millennials, highlighting shorter attention spans.

Felix Starck, founder of Baller League, has won over former professional footballers including ex-Chelsea FC captain John Terry, who manages one of the teams.

Baller League has also enlisted YouTubers KSI and IShowSpeed — who have a combined total of around 65mn subscribers on the platform — to promote the competition in the UK and the US, while 30-year-old Spanish internet personality Ibai Llanos leads Kings League side Porcinos FC.

While streamers, celebrities and former football stars take the limelight, investors are playing a key role in funding the new leagues.

The venture arm of Swedish private equity group EQT led a $25mn investment in Baller League in December. New York-based Left Lane Capital backed Kings League’s €60mn fundraising just months earlier.

Fundamental changes in the way audiences watch sports explain why investors are backing new formats, according to Vasu Kulkarni, partner at Baller League backer Courtside Ventures.

Streaming and social media platforms have allowed these start-ups to reach audiences around the world well before traditional broadcasters of the sport take notice.

The likes of Twitch and YouTube have “democratised the distribution of content”, Kulkarni says.

Left Lane, which has also backed the Freestyle Chess start-up fronted by world number one Magnus Carlsen, North America’s Pro Padel League, and the Snow League founded by snowboarder Shaun White, is betting that new ideas can win over fans and commercial partners.

“Properties like Kings League, and other investments we’re doing, are great avenues for large brands and new brands alike to reach an audience that consumes media and entertainment fundamentally differently than generations that came before them,” says Left Lane Capital chief Harley Miller.

Big brands are joining in. German sportswear maker Adidas and streetwear retailer JD have partnered with Kings League. US-based Nike and retailer Foot Locker have worked with Baller League, alongside soft drinks giant Pepsi, protein snacks company Grenade, and others.

Broadcasters are also signing up. Sky Sports, which is synonymous with the English Premier League, the world’s richest domestic football competition, agreed to screen Baller League’s inaugural season. DAZN, the UK media group owned by Sir Leonard Blavatnik and backed by Saudi investment firm SURJ, will showcase W7F.

Whereas Baller League has launched in the UK with newly created teams such as John Terry’s 26ers and the Yanited team led by YouTuber Angry Ginge, W7F is focusing on elite women’s football.

Manchester United, Bayern Munich, Ajax and Benfica have all confirmed that they will play in W7F’s inaugural event in Portugal, alongside Manchester City, Paris Saint-Germain, AS Roma, and Sweden’s FC Rosengård. Its player advisory council is led by double World Cup winner Tobin Heath. And prize money for the best four teams will be shared between clubs, their players and staff.

The day after W7F wraps up, Arsenal and FC Barcelona women’s teams go head to head in the Uefa Champions League final, the pinnacle of the European 11s club game, around 35 minutes away in Lisbon.

W7F co-founder Jennifer Mackesy, who also co-owns US National Women’s Soccer League team Gotham FC, points out that other sports have experimented with new formats. Earlier this year, stakes in the eight teams in The Hundred, a competition launched by UK cricket authorities in 2021, sold for hundreds of millions of pounds.

“If you look at sports in general, many are introducing short format versions, so it feels natural for it to be happening in football as well,” she says.

Modern warfare is reshaping metals demand, says mining veteran

Surge in military consumption comes as growth of renewable energy supercharges demand for copper

Veteran mining entrepreneur Robert Friedland said modern warfare and growing demand for weaponry had “dramatically” altered the landscape for metals demand — and that the west was unprepared for the shift.

Rising defence spending and military conflicts, from Ukraine to Kashmir, have exposed critical shortages of traditional materials such as copper, which is essential for ammunition, and niche metals such as graphite and germanium used in advanced weapons systems.

Friedland, who co-chairs Ivanhoe Mines, said western governments had belatedly “woken up” to their vulnerability after decades of neglect, adding that it would “change dramatically what we need to mine”.

“Everyone in the American government — at the highest level — is completely concerned with the supply chain, and critical raw materials,” Friedland, a US-Canadian dual citizen, said in an interview. “They don’t have any of the metals that modern warfare requires.”

The warning from a leading industry voice exposes the extent to which China’s dominance of critical minerals and the global battle to secure essential raw materials pose a threat not just to western industry but to America’s military dominance.

US President Donald Trump has issued several executive orders on minerals since taking office in January that seek to boost domestic mining and deep sea extraction.

Military drones and satellites deployed in combat are built using an array of niche metals, while the stable power supplies and huge data servers on the ground needed to run the equipment require many of the same materials.

The rare earth metal scandium is used in aerospace, beryllium is a lightweight component of fighter jets, and semiconductors can contain gallium.

The surge in military demand comes amid the simultaneous growth of renewable energy that have combined to supercharge demand for copper, said Friedland, whose company is a leading copper producer.

“The military aspect is demanding a lot of the same metals, if not exactly the same metals, that the greening of the world economy also needs,” he explained. Electrical grids, solar panels and other forms of renewable energy will require large amounts of copper, which is used in wiring.

Leading companies including BHP, Glencore and Barrick Mining are racing to build or buy new copper mines because of a looming supply shortage expected in the next decade.

Jon Barnes, copper analyst at market intelligence firm Project Blue, estimates that the copper demand boost from higher military spending is about 500,000 tonnes per year, or about 1.5 per cent of annual demand. The exact amount is difficult to quantify due to the secrecy surrounding national weapon stockpiles.

Russia’s war in Ukraine illustrated how existing ammunition stockpiles were “far too low”, particularly for artillery shells, he noted.

“US production of 155mm standard artillery rounds doubled last year, and will double again this year, both to supply Ukraine and to replenish strategic reserves,” said Barnes, noting that each shell contained up to 1kg of copper.

Bullets and shells are often made of brass, an alloy of copper and zinc.

David Goldman, head of trading at the Novion Global brokerage, estimated that rising defence budgets and rearmament were increasing the copper demand from western militaries by between 15 and 18 per cent per year. This was a “critical factor underpinning the metal’s market tightness and long-term demand outlook,” he added.

Yet a report from the Carnegie Endowment think-tank in February found that mineral inventories in the US National Defense Stockpile had dwindled since the 1950s, and would cover less than half the military demand in a hypothetical one-year conflict.

The future for Mytheresa and the other e-commerce brands in the LuxExperience e-commerce group will be discussed during a conference call Thursday.

Mytheresa, the luxury multibrand digital platform that is now part of the newly formed LuxExperience group, posted another solid quarter marked by sales and profitability gains.

On Wednesday, Mytheresa reported that adjusted net income, which excludes legal and consulting costs related to the acquisition of Yoox Net-a-porter and share-based compensation, rose to 5.4 million euros in the third quarter ended March 31. That’s up from the 3.8 million euros reported in the year-ago quarter.

Mytheresa had a net loss of 5.5 million euros in the third quarter versus 3.3 million euros in the year-ago quarter.

Net sales at the Munich-based Mytheresa grew 3.8 percent to 242.5 million euros in the third quarter compared to 233.6 million euros in the year-ago quarter. Europe, with an 8 percent third-quarter sales gain, was Mytheresa’s strongest region during the quarter.

“We feel it was a strong, solid quarter, given the current environment. Growth was good but we are used to more. Profitability remains strong,” Michael Kliger, chief executive officer and managing director of LuxExperience, told WWD. Kliger also still runs the Mytheresa business.

Like other fashion and luxury brands, Mytheresa and its parent LuxExperience are navigating fast-moving changes in the stock market, consumer spending patterns and international trade policies. “The biggest challenge is this constant change,” Kliger said. “It’s difficult for both manufacturers and consumers. We would welcome some stability. Regardless of which way tariffs go, stability is what we need.”

He said Mytheresa has some exposure to China, where some European products sold by Mytheresa are made, but he added that compared to other sectors, such as toys, “we are not as heavily exposed.”

Bestselling categories last quarter at Mytheresa were resort/beachwear and fine jewelry. Among the bestselling designer brands were The Row, Alaïa, Brunello Cucinelli and Dolce & Gabbana, the company indicated. Also, sales with Mytheresa’s top-spending customers globally rose 17.9 percent, Kliger noted.

On April 23, LuxExperience — formerly Mytheresa — closed its deal to acquire Yoox Net-a-porter from Richemont, which provided LuxExperience with 555 million euros, no debt and a 100 million-euro credit facility for Yoox Net-a-porter, in exchange for 33 percent of Mytheresa shares.

LuxExperience will host a “strategic update” conference call at 8 a.m. EST Thursday to provide more details on the new group’s structure, its key strategic initiatives, financial details, as well as management’s plans and direction moving forward.

Beginning in the fourth quarter of fiscal year 2025, LuxExperience will be reporting in three operating

segments: Mytheresa, Net-a-porter and Mr Porter, and Yoox and The Outnet.

The fourth quarter of fiscal 2025 is expected to add another 300 million to 350 million euros in net sales and an adjusted EBITDA loss of 20 million to 30 million euros to the Mytheresa stand-alone business fiscal 2025 numbers, ending on June 30.

Last week, Mytheresa reshaped its leadership through a series of promotions that came in the aftermath of appointments made at LuxExperience. Simon Tweed was promoted to chief commercial officer, and Dominik Lass was promoted to chief growth and site management officer. Tweed succeeded Richard Johnson, who became chief business officer at LuxExperience, and Lass succeeded Gareth Locke, who became chief data and digital officer at LuxExperience. Also, Tiffany Hsu, who continues as chief buying officer leading the buying team and its strategies across all categories, took on the additional role of group fashion ventures officer of LuxExperience.

“We wanted to be very fast to bringing in the right new leadership,” Kliger said. At other levels, he added, “There will be more changes at the different brands.” LuxExperience, he said, is “absolutely unique as the largest, multifaceted luxury group in digital.”

Going forward, “We need to invest more on the front end,” meaning what the customer sees and experiences, “and save more on the back end,” Kliger said. “[Financially] we are very well prepared. The house is clean and in order.”

In other third-quarter results at Mytheresa, gross merchandise value grew 3.8 percent in the third quarter to 261.3 million euros, compared to 251.9 million euros in the prior-year period.

The average order value increased by 8.8 percent to 753 euros in the last 12 months of fiscal year 2025 versus 692 euros during the same period of fiscal year 2024.

The company confirmed its full fiscal 2025 guidance at Mytheresa, but added that given the recent uncertainties over tariffs and their effects on customer sentiment, GMV and net sales are now projected to fall at the lower end of the forecasted range of 7 percent to 13 percent. Adjusted EBITDA margin is seen in the range of 3 percent and 5 percent.

”The results of the third quarter demonstrate once again the strength of the Mytheresa business model,” Kliger said in his prepared statement. “Solid GMV growth, higher top customer spend, continued product margin expansion and strong profitability show the health and resilience of the Mytheresa business despite macro headwinds.

“The strong results of the Mytheresa business model underline the fantastic prospects for the recently acquired Yoox Net-a-porter business,” Kliger said. “We continue to demonstrate our ability to execute well and achieve strong results under macro uncertainties where other players fail. Combined we will create the leader in global digital, multibrand luxury with strong profitability and growth. Our medium-term ambition is to reach around 4 billion euros in net sales per year and 7 percent to 9 percent in adjusted EBITDA margin.”