Reed’s view

One of the most profound takeaways from my interview with Reflection AI co-founder and CTO Ioannis Antonoglou this week on Semafor’s Future Proof is his declaration that the AI era will force us to redefine what each business actually does and rebuild it from the ground up, using AI as scaffolding. And that is going to take decades, a lot longer than most people in Silicon Valley project.

Right now, we are thinking about data all wrong. Today, businesses mostly capture data that’s measurable or the result of some kind of work product. What’s usually not captured is the work itself — the difficult-to-define causal link that connects all of the actions that a company takes. “A lot of the context is like, ‘we jump on a call, or someone shared something or said something’” Antonoglou told me.

I’ve been thinking about that challenge with my own work. How can a journalist capture gut feelings about what might make a good story? (It’s a bit like that famous 1960s US Supreme Court case on pornography, “you know it when you see it.“) What about capturing how reporters decide who to call first, or what questions to ask to get the most revealing answers?

In the AI era, Antonoglou told me, companies have to throw out what they’ve done for decades and come up with new ways to measure and carry out their work. That’s part of what Antonoglou is trying to help customers do with his company’s open-weight models. “It will take maybe a decade or two decades before people really rethink how things are done and how they can just do them with AI in mind,” he said.

It won’t happen in every industry at the same time — probably a good thing for the economy’s stability — but it does provide another new entry for startups that move faster than incumbents to spring ahead.

Notable

• Nvidia is in early talks to acquire Reflection AI, Financial Times reported.

In the span of weeks, AI altered the video game industry with mashups, which allow people to combine multiple popular games into one — and Xbox is leaning in.

AI-coding models have crossed new capability thresholds that allow users to reverse-engineer and recreate complex game code that would have taken humans years to do. People have created mashups that allow characters to play in , or skateboard through .

“These experiments challenge long-held assumptions about our industry,” an Xbox executive said in a memo sent to employees and posted Tuesday on the company’s website, adding that the viral mashups mean gamers have become creators. “These are unmistakably good outcomes for players, even when (and sometimes ) they challenge our existing business models.”

The video game giant announced Xbox Labs, which will aim to work with users as well as its own developers and engineers to make games and experiences stemming from the new AI-fueled creations.

David’s view

YOUNGSTOWN, Ohio — Toward the end of Monday night’s MAGA rally, after Jon Husted heard Donald Trump compliment his jawline and his “ass,” he thanked the president for making Ohio so much easier for Republicans to win.

“The Youngstown area, for decades, used to vote Democrat,” the Republican senator said. “And then you ran for office in 2016, and flipped it red forever.”

For a decade after that, Youngstown has become the first stop on what media critics derided as “Trump voter safaris,” journeys into the working-class counties that never voted Republican until he showed up. Husted’s claim of a permanently red state, however, isn’t adding up for Democrats: As soon as I arrived this week, they insisted that MAGA’s advance was over.

This isn’t because Democrats have snapped back to the image and values they ran on in the 1970s, when they had a lock on this state. No, the party insists that Republicans are in charge, making voters angry with their handling of the economy and the Middle East, so the culture-war politicking that worked for a decade won’t be as potent in November.

“People aren’t buying that again because they’ve realized you can’t deposit culture war into your bank account,” said Chris Anderson, the chairman of the Mahoning County Democrats, who’d spent years trying to limit their losses and defections. “You can’t fill your gas tank with it.”

Campaigns have a queasy rhythm to them — hype followed by panic followed by hype. We’ve reached the time in the cycle where the party that built a post-Labor Day polling lead begins to question its own confidence.

“They’re undersampling Republicans,” Speaker Mike Johnson told the faithful in South Texas on Tuesday, a part of that state that seemed to be following the same rightward march as northeast Ohio — and before that, Appalachia.

Republicans around Youngstown expected the trend of underestimating their vote to hold this year, but not accelerate. They agreed that Democrats would at least be competitive. Rep. Michael Rulli, who represents the Mahoning Valley in Congress, said that the GOP got an opening when “Clinton came in and lied about NAFTA,” which made local Democrats thrash around in search of a populist alternative.

“When Trump came around, the people just took to it, and so they’re giving us a shot,” Rulli added. “This area will not always stay Republican or Democrat.”

This year’s Democrats are making hard plays for northeast Ohio, at least to trim the GOP margins. Former Sen. Sherrod Brown, who lost the five most Democratic counties east of Cleveland for the first time in 2024, has painted Husted as a “Big Tech” shill, captured by the next industry that’ll threaten working-class jobs. Amy Acton, the party’s gubernatorial nominee, takes every chance to talk about her Youngstown roots; her ads often portray Vivek Ramaswamy, the billionaire GOP nominee, playing tennis as he daydreams about cutting Medicare and Social Security.

“I know what it’s like to not have the heat on, or live in a tent in the winter and experience a lot of neglect and abuse,” Acton told me on Tuesday, when I asked her to respond to the president rallying in Youngstown — specifically, about him telling voters they’d get rebate checks and energy bill relief only if Republicans won. “And I can also tell you that I wouldn’t be here today if it wasn’t for the institutions that gave me a chance.”

A Democratic comeback in Ohio is unlikely to look like the winning maps of Barack Obama’s campaigns, much less Bill Clinton’s. While losing to Bernie Moreno two years ago, Brown ran stronger in the suburbs of Cleveland and Cincinnati than he had in elections he actually won.

On Monday, the standard Trump rally scene of MAGA-hatted voters in line and liberals yelling at them from free speech zones showed how the coalitions had changed. The protesters skewed older; the younger they were, the more profanity they were comfortable putting on cardboard. A “progress pride” flag was hoisted on a pole, right under an American flag. Any Trump fan who objected got an earful about the “pedophile president” they were lined up for.

Trump, at this point, was not the rebel candidate who first showed up in Youngstown 10 years ago, with rally speeches about the threat of mass Muslim immigration. He was the party leader every Republican wanted to borrow some aura from, by communing with his superfans.

Ramaswamy posed for selfies a few steps away from MAGA activist Vince Fusca. Blake Marnell, who wears a brick-patterned suit to every Trump rally, got a seat near the main stage. Both men were at the 2024 Trump rally in Butler, Pa., where a failed assassin’s bullet clipped his ear; neither needed convincing that he was saving eastern Ohio, where they didn’t live, from neoliberalism.

The Covelli Centre, where Trump had rallied before, was a bit more than half-full when the president got onstage. Like Democrats used to, he described all the investments he was bringing to the region. Submarine construction was coming to Cleveland; nearby Warren was getting a new ​​Kimberly-Clark plant; he would figure out how to save the local heating utility company.

The applause thinned out when he talked about how he’d rebranded artificial intelligence as “Super Intelligence.”

Notable

• David Skolnick covered the rally for the Youngstown Vindicator.
• Richard Cowan went to Warren, Ohio, for Reuters, to take the temperature of its Obama-Trump voters: “We ⁠believe our Christian ​values are more than gas prices.”

The News

Aaron Day’s third-party campaign cost Republican Kelly Ayotte her Senate reelection bid in 2016. Now he’s trying to take his spoiler project national.

With several Senate races tight enough for an alternate candidate to make a real difference, whether they’re Libertarian or another third party, Day is looking to spend as much as $2.5 million — or perhaps less, if his effort works as designed — to cost the GOP the Senate.

Day’s strategy is simple: Use his Stark Freedom PAC to spend relatively small amounts on online ads made with AI that boost name ID for spoiler candidates, figuring he can do just enough to hand those races to the Democrats.

Republican leaders are highly skeptical of Day’s efforts, but he sees a real chance at disrupting races across the country. What’s more remarkable is how open he is about his goal of ending the Senate Republican majority.

“You call it a spoiler campaign, I call it holding Republicans accountable,” Day told Semafor in an interview. His website is equally explicit: “We fund the margin. It costs the GOP the Senate.”

Day is targeting eight states where he’s deduced that boosting third-party candidates would hurt the Republican nominee: Texas, Iowa, New Hampshire, Minnesota, South Carolina, Michigan, Ohio, and Kansas. It’s a “Moneyball” theory of modern politics, banking on a relatively small amount of cash to mess up the margins in close contests.

Nudging a third candidate’s vote share up by a couple of percentage points higher, as he explained, takes a lot less money than the obscene amount needed to actually win a race.

“People are going to be shocked after the fact at how effective this is,” Day said. “Most voters don’t know that the third-party option exists, and a lot of these candidates don’t actually have money, and they’re not allowed to participate in the debates.”

In addition to Ayotte’s 2016 New Hampshire campaign, Libertarian candidates’ support boosted former Democratic Sen. Jon Tester in his 2006 and 2012 Montana races. The effect was clear in Nevada’s 2024 Senate race, which Democrats narrowly won as nearly 5 percent of voters picked a candidate outside the two major parties.

And no one can forget Jill Stein’s Green Party spoiler effect on Hillary Clinton’s presidential chances in 2016.

It’s hard to see how giving Democrats the Senate helps advance Day’s causes — which include concerns over centralized digital currencies and government surveillance via cryptocurrency legislation. But Day says he wants to check President Donald Trump through “gridlock” and that with Democrats in charge, the crypto market structure bill and other legislation he dislikes will continue to stall.

Several Republican groups, including the National Republican Senatorial Committee and Senate Leadership Fund, declined comment.

While third-party hopefuls appreciate his support, their goals are different. Ted Brown, the Libertarian candidate in Texas, said he’s running to win, not to cost Republicans Senate control.

“I’m running to defeat the corrupt two-party system,” Brown told Semafor. “But I would say this, if the Republicans lose the Senate on November 3: The good news is, the Republicans lost control of the Senate. The bad news is, the Democrats won control of the Senate.”

Day said his model would be replicable to punish a Democratic majority in the future as well, by boosting Green Party candidates to eat into their candidates’ margins: “I actually view this, if it works, as something that can be used to hold both major parties accountable.”

Know More

So, why do this? Day was originally planning to be a candidate himself this fall, even fighting to get ballot access in New Hampshire to take out former Sen. John Sununu, R-N.H.

But he said he didn’t run, in part because he was in negotiations with Republicans and the Trump administration over a list of demands that weren’t fulfilled: “I was told something definitive was going to happen, and it did not.” He declined to go into further detail; the White House did not comment.

After the schism, he threw his support behind Edmond Laplante, a Constitution Party candidate in New Hampshire. He then decided to “duplicate” his 2016 bid against Ayotte by boosting anti-war candidates to reach the small percentage of “disaffected voters in these swing states.”

“People do not want to vote for the Republican, but a lot of people still don’t want to vote for the Democrat,” Day said. “Texas is in play, Kansas is in play, South Carolina is potentially in play. I mean, who would have ever thought? But it’s true, and this really could make the difference.”

Day’s ads are unique to each race, but most have peppy AI music critiquing the GOP candidate. They knock Sen. Darline Graham, R-S.C., for her pro-war votes and boost Libertarian Kasie Whitener; in New Hampshire, they hit Sununu for supporting the Wall Street bailout; in Texas, they whack state attorney general Ken Paxton for being a “mouthpiece for DC” and dub Brown the “voice of Texas.”

Republicans are more worried about Day’s machinations in New Hampshire and don’t believe he’ll be effective anywhere else.

Burgess’s view

I’m a skeptic, and so naturally lean a bit bearish on the idea of a national spoiler campaign funded by the political equivalent of spare change. I watched a bunch of Day’s ads, as well, and found them somewhat tedious but also relentlessly on-message in driving the name ID of these somewhat obscure candidates. (It’s possible that AI-generated music just isn’t for me.)

But Day is onto something with the spoiler effect, whether it’s induced by him or not. It’s undeniable that disaffected Republicans who cast primary votes for, say, Sen. John Cornyn in Texas or Rep. Ralph Norman in South Carolina may struggle with voting for Paxton and Graham — but not want to support their Democratic counterparts either.

It just won’t be clear until Election Day how big of a threat these candidates are. The percentages they are drawing in polls are small enough to be a rounding error; given how tight the polls are, a rounding error still could cost Republicans multiple Senate seats.

Notable

• Brown is courting jilted Cornyn voters, Houston Public Media reported earlier this year.

Formula 1 will return to Africa for the first time in more than three decades with a Grand Prix in Rwanda in the early 2030s, the sport’s governing body confirmed.

The FIA, which has committed to a 10-year race deal, linked the move to expanding the global reach of F1, highlighting the “exciting growth opportunities” of the continent’s young fan base.

After Rwanda beat South Africa to the honor of hosting a Grand Prix, President Paul Kagame said at the launch in the capital, Kigali, that “today belongs to Africa.” The race forms a significant addition to Rwanda’s growing portfolio of international events as it raises its global investment and tourism profile.

But rights group Amnesty International has accused the FIA of handing the country a “sportwashing prize.” It accuses the authorities of arbitrary detention and torture of opponents, as well as stoking conflict in neighboring DR Congo — all of which Kigali denies.

Malawi launched a nationwide crackdown on fuel hoarders and black market sellers as the nation struggles with shortages that have left truckers queuing for up to a week and bus fares doubling on some routes.

Diesel and petrol have been scarce for weeks because the country lacks the hard currency to buy fuel supplies, sparking a scramble for dollars that has seen the central bank sell off gold to pay suppliers and the government return to the IMF for a bailout.

Malawi, which has among the highest fuel pump prices in Africa at more than $3 a liter, highlights the impact of a $100-plus per barrel crude price on import-dependent economies with thin buffers. Unlicensed resellers face arrest, and stations caught hoarding can lose their license under the new measures.

The IMF last week said it was making “considerable progress” in designing a “package of macroeconomic policies.” Its last program was a $175 million loan that expired in May last year, the latest in a string of support packages for one of the continent’s poorest countries, whose agriculture-based economy has been hit hard by extreme weather patterns.

DR Congo’s former President Joseph Kabila has formed a new rebel movement incorporating Rwanda-backed forces, openly taking charge of the insurgency despite US sanctions against him.

The move deepens the political and security threat to President Félix Tshisekedi’s government and challenges Washington’s efforts to end fighting and secure access to the country’s critical minerals.

UN experts reported in June that Kabila’s growing prominence appeared intended to obscure Rwanda’s role by portraying the rebellion as a Congolese movement addressing a national problem. Rwanda has acknowledged defensive “security coordination” with the M23 insurgents, who have held large swaths of mineral-rich eastern DR Congo for more than a year. US sanctions against rebel leaders and Rwanda’s military, a Washington-brokered peace deal, and talks mediated by Qatar have so far failed to end the fighting.

Insecurity has complicated DR Congo’s hopes of profiting from rising demand for copper, coltan, and cobalt used in digital infrastructure and the energy transition. Washington has paired its peace efforts with a bid to loosen China’s grip on mining in the world’s largest cobalt producer.

The IMF raised its 2026 growth forecast for sub-Saharan Africa to 4.5%, cementing its position as one of the world’s fastest growing regions.

The IMF said the new projection, marginally higher than July’s 4.3%, “masks substantial divergence,” with oil-importing economies the most exposed to higher energy and food prices driven by Iran-war-related supply chain shocks.

The IMF expects the continent’s biggest economy, South Africa, to grow more than four times slower than the region this year and next, as the higher oil prices hit its already fragile prospects. On the flip side, the fund raised its projected growth rate for Nigeria, Africa’s top crude oil producer, to 4.2%, citing a “favorable terms of trade effect.”

Looking globally, the IMF named rising national debt as a growing risk to financial stability, “especially with high borrowing costs.” Last week, the World Bank said that nearly four-fifths of African countries spend more on interest payments than on health or education.

Tokenmaxxing may have been the shortest-lived corporate try-hard hustle in history, but many of Wall Street’s year-end bonuses still hinge on AI use. Applicants’ AI skills are nearly four times as important in hiring decisions as where they went to college, and a quarter of US financial firms have tied raises, promotions, and bonuses to AI proficiency, according to a survey of 500 companies by financial recruiting firm Selby Jennings. Breathe easy, bulge-bracketers: The practice is more common among fintech startups and smaller firms than brand-name banks and trading houses, Jacob Summers, Selby Jennings’ head of tech recruiting, told Semafor.

Nearly a third of firms surveyed have created new roles or departments to track AI use, where total token burn is less important than wringing some actual value out of all the token use. (“Tokenmaxxing is dead, long live valuemaxxing,” proclaims an IBM blog post from June.) But in many organizations, monitoring that work falls to managers, turning them into part-time AI accountants.

The Scoop

Saudi Arabia’s sovereign wealth fund is preparing to inform organizers of the 2034 men’s soccer World Cup that it plans to drop five new stadiums it proposed to build to host the tournament, according to people familiar with the matter.

Public Investment Fund will likely narrow its focus to three new stadiums as it cuts spending on some of its signature domestic investments, the people said. Dropping the five venues would leave the kingdom with 10 stadiums for World Cup matches. The changes are part of a revised plan the kingdom is preparing to submit to FIFA, the tournament’s organizers, the people said.

PIF is looking to drop plans to develop stadiums in King Abdullah Economic City and Qiddiya Coast, both near Jeddah; Roshn and New Murabba in Riyadh; and NEOM, in the kingdom’s northwest. Several of the cancelled stadiums are attached to broader real estate projects that have been halted or where work has slowed.

Saudi Arabian officials are still working on the updated proposals and the plans could change, the people said. PIF and the Saudi Ministry of Sport didn’t respond to requests for comment.

Know More

Reuters earlier reported on the cancellation of the NEOM stadium, which was envisaged as being on the roof of The Line, a 500-meter-tall skyscraper. Work on The Line has effectively ground to a halt, and NEOM has not allocated any funding for the project until after at least 2030, Semafor previously reported.

Saudi Arabia had also proposed a 45,000-seat stadium at Qiddiya Coast, a planned entertainment and tourism destination north of Jeddah. That development has also been put on hold. Another 45,000-capacity stadium in Riyadh’s New Murabba district is also set to be dropped. Work on the wider development has slowed after the departure of Chief Executive Michael Dyke and the suspension of work on the project’s centerpiece, a 400-meter-tall, cube-shaped skyscraper with screens lining its interior, similar to The Sphere concert venue in Las Vegas.

The kingdom is still proceeding with plans for other new stadiums including one in Dhahran being developed by Saudi Aramco, and the King Salman International Stadium and Prince Mohammed bin Salman Stadium in Riyadh.

The cuts could leave Saudi Arabia developing just six new stadiums and refurbishing four existing ones for the World Cup. Four of the stadiums it plans to use in 2034 are also due to host matches for the 2027 Asian Cup, which starts in January.

The outlook for that contest going ahead in Saudi Arabia has been thrown into doubt by the kingdom’s involvement in the war in Yemen against Houthi militias. The group has launched multiple attacks against Saudi cities in recent weeks, shutting down the capital’s airport and killing at least 18 and injuring hundreds.

Qatar also previously dropped four of the stadiums it had planned to build for the 2022 World Cup as it got closer to the tournament.

Notable

• Saudi Arabia shelved plans for a World Cup stadium at the futuristic city of NEOM, Reuters reported earlier this month

AI agents, meet double agents. OpenAI said it identified, fired, and reported to the FBI an employee who bugged its office. The employee, a Saudi national later identified by law enforcement as Abdulrahman Alfozan, was arrested last week and charged with illegally recording company communication. (He appears to have some ties to members of the Saudi business elite.) Among the evidence against him: chatbot logs about how to install recording devices.

Startup espionage has been pursued for far less (see: the Deel-Rippling drama over corporate HR software), but the FBI’s quick work and public rollout of the arrest shows how high the stakes are for the US government and frontier labs. The arrest comes days before the White House AI task force’s first meeting. Its chair, Jay Clayton, cited the case as proof the group is needed.

A little-noticed deal this week for senior-care clinics is the first shot fired in a Wall Street turf battle. BlackRock’s HPS credit arm is essentially lending $2.8 billion to Humana, marking Larry Fink’s entry into a space that Apollo has had to itself until now.

Apollo’s dryly named “capital solutions” business, launched in 2024, was a bet that asset managers could cosplay as banks. Their money could go places that banks’ deposit funding couldn’t, especially after post-2008 regulations. Apollo has since made big loans to companies including Intel and Keurig Dr Pepper, notching $800 million from the business last year on its way to a $1 billion target.

Two years ago, I wagered that BlackRock and Apollo would be the winners of the weird debt world that limped, then sprinted, out of the global financial crisis. Apollo got there first, but BlackRock just threw its hat in the ring.

Spain’s king said his country’s control of exclaves in Africa was “non-negotiable,” after the cities became flashpoints in territorial disputes with Morocco and Europe’s anti-immigration debate. Ceuta rose to international prominence in July, when more than 70,000 people swept into the tiny exclave in a matter of hours. Most have returned to Morocco, which Spain’s prime minister accused of entering its territorial waters during the crisis.

But European far-right parties have seized on the crisis as evidence that Madrid’s welcoming stance toward foreigners — it previously vowed to regularize hundreds of thousands of undocumented migrants — has backfired: “The future of Europe is being decided in Ceuta,” the leader of France’s hard-right National Rally party said while visiting the Spanish territory.

India cracked down further on anti-government protests that have grown substantially in recent months, escalating from attacking the authorities over education to frustration with what critics see as broader threats to the country’s democracy. Three leaders of an upstart political party were jailed and an historic protest site in central New Delhi — “the country’s most recognizable stage for public dissent,” per AFP — was shut down.

The latest demonstrations have centered around a review of India’s electoral rolls that has led to an estimated 130 million people being barred from voting. Opponents of the effort say it has targeted minorities and critics of the ruling Hindu nationalist party; in Delhi, for example, The Hindu reported that Muslims were disproportionately affected.

Iran-backed Houthi fighters reportedly hit the headquarters of Saudi Arabia’s national oil company in overnight strikes, stoking a conflict that risks spiralling into a wider war.

The attacks follow a Houthi onslaught that killed 13, injured hundreds, and forced Riyadh’s airport to shut at least through Saturday, denting the kingdom’s reputation for stability and piling pressure on the country’s de facto ruler.

Analysts fear the conflict could expand beyond the Arabian Peninsula: The Houthis are reportedly building an advanced missile using Chinese parts. US President Donald Trump has accused the group of “purposefully trying to drive up Oil Prices” ahead of November’s midterm elections; Tehran is reportedly targeting crude tankers in a bid to keep prices elevated.

The threat of a worker’s strike — which has since been averted — at Chile’s La Escondida, the world’s biggest copper mine, sent prices for the metal near record levels, underscoring the Latin American country’s growing role in the industry.

Other recent temporary closures in some of Chile’s copper mines, which are responsible for almost a quarter of global output, because of worker accidents and benefits disputes have also pushed up international prices.

Demand for the metal has surged on the back of the AI data center and EV production boom, with countries globally racing to lock up supplies. But despite production rising to record levels in 2025, UBS nonetheless expects shortfalls to reach an all-time high next year.

The CEO of ASML, the world’s only provider of the machines that make cutting-edge chips, said AI demand would outstrip supply for years to come, easing investors’ worries of a spending bubble. His comments come after Europe’s most valuable company reported bumper profits that far exceeded analyst expectations, boosting its share price.

Investors globally have grown concerned that AI spending may be cresting as borrowing costs surge, with the International Monetary Fund warning that a market correction posed a threat to the global economy. But, for now, spending on the technology remains strong: Goldman Sachs expects AI infrastructure investment to drive a $7.6 trillion boom through 2031.

Chinese exports jumped 36% year-on-year in September, a bumper figure that is likely to vex the country’s trade partners, who have demanded Beijing address imbalances and alleged domestic overproduction. Faced with US and EU restrictions, which have dented Chinese imports in the West, Chinese companies have turned to other markets, sparking criticism from producers in Southeast Asia and Africa, who say their industries risk being hollowed out.

The latest figures pushed China’s trade surplus in 2026 to almost $1 trillion, nearing the entire figure for last year, underlining the country’s continued reliance on exports, with domestic consumption weighed down by a long-running real estate crash and rising youth unemployment. Beijing has so far resisted calls for a significant stimulus package.

The News

Kenyan investors hoping to participate in the Dangote refinery initial public offering now have access through a financial instrument being used for cross-border African investment for the first time on Nairobi’s bourse.

The use of global depositary receipts (GDRs), which allow backers to buy a stake in a foreign company without leaving their home market, bypasses regulatory barriers that have held up intra-African investment. The use of GDRs offers a template for exchanges across the continent to expand pan-African trade and broaden their investor bases.

After an extension of the IPO period was announced on Monday, Kenyan individuals and institutional investors will have until Oct. 27 to buy into their country’s $300 million allocation of Africa’s largest public offering.

The minimum entry price in Kenya was slashed from $824 to $4.12, matching what Nigerians were being offered. Announcing the extension, Dangote said he wanted greater African participation and highlighted the Kenyan arrangement that he hoped could be replicated.

African policymakers are keen to deepen capital markets as a way to mobilize more of the continent’s domestic resources to fund infrastructure projects and reduce borrowing costs.

Know More

The refinery’s stock market debut was touted as a way for African investors to own a stake in the continent’s largest refining plant. But the prospectus for the $1.6 billion share shows it was not registered as a public offering outside Nigeria, Reuters reported. That has left investors relying on their own country’s regulations or finding workarounds using the few eligible online financial platforms. Reuters reported patchy take-up outside Nigeria, reflecting low levels of cross-border investment.

The Nairobi Securities Exchange’s (NSE) approach is structured around Standard Bank’s Kenya subsidiary Stanbic, which will hold the shares and issue the GDRs. These will be traded on the NSE in Kenyan shillings, and Stanbic will manage the foreign exchange conversion and pay out dividends.

Karimi Warui, vice president of investment banking at Renaissance Capital, which is overseeing the IPO in Kenya, told Semafor that the Dangote Group initially intended to pursue a conventional cross-listing approach to get on the NSE and other stock exchanges, but ultimately settled on GDRs for ease. Trying to deal with the rules and regulations of 10 different jurisdictions “became a bit onerous for them,” she added.

She said this approach in Kenya could inspire others. “I wouldn’t be surprised if companies that are already listed like [Kenyan telecoms company] Safaricom pursue GDRs in the future to tap into markets like South Africa and Nigeria,” she said. “I actually think we will see more of this now,” saying the IPO would “show regulators the need to work with financiers and issuers” to accelerate growth and integration of Africa’s financial markets.

Warui also emphasized the need for regulators to customize policies to fit African markets instead of copying Western regulators.

The use of GDRs comes amid a significant push to enhance retail investing in the country. Safaricom this year rolled out NSE trading on the mobile money service M-Pesa, helping drive retail participation in the IPO of the state-run Kenya Pipeline Company (KPC). Warui told Semafor that Renaissance Capital was copying the KPC blueprint for the Dangote IPO — with an online platform for share purchases during the offer period, and trading on the M-Pesa platform expected once it is listed on the NSE.

Besides Kenya, Uganda’s markets regulator has approved a restricted offer limiting participation to high net-worth individuals and professional investors. Botswana has been selected to host the southern African portion of the public offering, Bloomberg reported.

Step Back

Some analysts have cautioned that the GDRs could leave Kenyan investors exposed to FX risks as the GDR tracks the Lagos share price, which is in naira, meaning currency devaluation could significantly affect investors. Acknowledging the concerns, Warui noted that Dangote Refinery’s revenues were dollarized and that dividends could also be paid in dollars, mitigating the potential impact of naira devaluation.

Previous GDR listings by African companies have been outward, where issuers list the underlying shares on exchanges outside the continent — mostly on the London Stock Exchange (LSE) to attract Western capital.

Room for Disagreement

Sultan Mwangi, a Nairobi-based investor and financial researcher, predicted that participation in the Dangote IPO among Kenyan investors would be far lower than expected, especially among retail investors.

He attributed this to the handling of the IPO which he said had left investors “disappointed” despite initial excitement. Among issues he cited were inadequate investor education and a need to address concerns regarding the use of GDRs, especially over whether this will leave people exposed to fluctuations in the value of the naira. According to Mwangi, the extension of the IPO offer as well as lowering the minimum investment were a response to low uptake among retail investors.

“People were not convinced, and the amount of time available to explain it has not been enough,” he told Semafor. Dangote Industries has yet to respond to enquiries from Semafor on whether the lowering of the minimum investment was a response to underwhelming participation among Kenyan retail investors.

Notable

• African nations should turn to an estimated $4 trillion in capital held by domestic institutions, such as pension funds, to develop infrastructure, the Africa Finance Corporation has said.

Wael’s view

In June 2008, I sat in a Jeddah Hilton conference room packed with ministers from more than 100 countries waiting for King Abdullah to arrive. Oil was closing in on a record price. Saudi Arabia’s message that day: The world had enough oil. It offered a modest increase in output and told governments to cut taxes and rein in speculators. Less than three weeks later, on July 11, crude hit about $147 a barrel.

This week in Riyadh, another ministerial gathering took place. The man now leading the kingdom’s response, Prince Abdulaziz bin Salman, was an assistant oil minister two decades ago. This time the crisis is different — and so is his answer.

Then, the argument was about speculation. Saudi officials said investors had pushed prices well past what supply and demand justified, and that financial trading in oil had grown many times larger than the physical market. Washington thought OPEC should pump more. Riyadh replied that it would not build capacity for buyers who did not exist. Now the argument is about geography.

Gulf crude is trapped behind the Strait of Hormuz, and the kingdom’s answer is to build around it. Prince Abdulaziz told the World Petroleum Congress that Saudi Arabia may lift its East-West pipeline capacity from about 7 million barrels a day to 10 million within three years, and he wants more international involvement. His logic is that the more countries have a stake in the line, the better it is protected.

Both responses share one feature. Saudi Arabia cannot solve the crisis alone, and it ends up paying for the attempt. In 2008 it built rarely used spare capacity and has carried its cost ever since. A new pipeline will follow the same pattern. When the war ends it will not run full, and Riyadh will keep it as insurance.

The oil market has also shifted. In 2008, OPEC was dominant and no one else could add meaningful supply. Some consumers searched for substitutes, and ethanol was an answer then. Today, it’s the electric vehicle. But neither remedy has removed the need for fossil fuels and no price spike has changed the thirst for oil.

The biggest difference is Washington. In 2008, the US relied on OPEC’s oil. Today, it has plenty of its own, a reality that may not be felt by Americans paying more at the pump. If America needed OPEC barrels as badly as it did in 2008, the politics of this current crisis would look very different.

Geopolitical risk has been the main factor driving $100 oil this year, with shipping and insurance comprising more than a third of the price of the global crude benchmark. Even if Hormuz is opened tomorrow, the new logistics of moving crude will weigh on producers. It will also change the relationship between states: Iraq is planning to build a pipeline through Syria to the Mediterranean, while Kuwait and Qatar may lean on their Gulf neighbors to reach ports outside the strait.

Ultimately, much of the bill will go to the same address: Riyadh. The kingdom has carried the cost of a largely idle pipeline for decades, and will soon have to revert to its role as the global swing producer, keeping prices fair to producers paying for new infrastructure, and consumers who won’t tolerate high prices forever.

Notable

• Saudi Arabia’s oil supply could still be threatened even after the end of the war. This report from the Center for Strategic and International Studies looks at what options there are.
• Despite the oil shock, the Saudi economy can remain resilient, according to this briefing from the Atlantic Council.

The News

Qatar’s sovereign wealth fund isn’t slowing its dealmaking, a senior executive said, even as the Iran war gutted the state’s revenue by 42% in the first half of the year.

The war “hasn’t impacted our progress,” Mohsin Pirzada, head of funds at Qatar Investment Authority, told Semafor. “We continue to invest, we continue to deploy.” “We’re obviously very mindful that we manage the surplus wealth for the state of Qatar, and that is largely derived by LNG exports,” Pirzada said.

The sovereign fund has remained an active investor, with its funds division deploying billions of dollars already this year. QIA announced a $20 billion investment partnership with JPMorgan last month, following a $25 billion agreement with Goldman Sachs just before the Iran war began.

While no new fund deals are “on the radar” now, Pirzada said, QIA “will have a handful of strategic platform arrangements with managers or institutions like JPMorgan, or like Goldman Sachs,” focused on firms that the fund has had long-standing relationships with.”

Know More

Before the war, QIA said it planned to invest $500 billion in the US alone over the next decade. The fund had expected to nearly double in size, boosted by an 85% expansion of its liquefied natural gas (LNG) output by 2030. That gas expansion has now been delayed — an Iranian attack on the Ras Laffan complex knocked out about 17% of its existing capacity. Qatar’s economy is expected to contract 15.6% this year, and the government will likely post a deficit.

QIA, with around $580 billion in assets, is a significant backer of Wall Street firms and US technology. Its appetite mirrors that of its Gulf peers: with the exception of Saudi Arabia’s Public Investment Fund, all are on track for one of their most active years of dealmaking ever, according to fund tracker GlobalSWF.

Qatar has been one of the most impacted Gulf countries by the US-Iran war. Unlike some of its neighbors, it has no export routes that bypass the Strait of Hormuz, and has been reluctant to move LNG tankers — which are more flammable and expensive than crude carriers — through the strait.

Despite the disruptions, there are signs of recovery. QatarEnergy Chief Executive Saad al-Kaabi said last month that the expansion project is expected to begin production in the first half of 2027. Meanwhile, an LNG export facility in Texas, majority owned by QatarEnergy in a joint venture with ExxonMobil, shipped its first cargoes in April.

Notable

• Qatar cut government department budgets by around a third and funding for overseas aid by about 85% to cope with the financial strain of the war, the Financial Times reported.
• A “dinosaur” gas tanker is one part of an ambitious effort to revive Qatari energy shipments, Bloomberg reported.

Europe made a “historic” blunder by caving to the Trump administration on tariffs during Trump’s second term, the former Canadian trade minister who helped negotiate the US-Mexico-Canada deal during the first Trump administration told Semafor.

“A real problem for the Western alliance has been the decision by the UK and by the EU to give in to the Trump bullying on tariffs,” Chrystia Freeland said. “People thought appeasement would win a reprieve for us all.”

The EU and UK have each negotiated with the administration following the imposition of unilateral tariffs, and the former agreed to a pact that went into effect this year. US trade relations with Canada, meanwhile, have broken down, and Ottawa has announced counter-tariffs following US pressure.

Freeland, who is out with a new book, said it’s “possible” albeit difficult for the US and Canada to return to a constructive relationship. That might need to wait until Trump is out of office, though.

“There would have to be a clear break because the problem is: How do you do a deal with someone who already broke the deal that you did with them?” she said.

All eyes are on the first meeting of the White House’s AI task force this week as groups and members of Congress try to influence the newly formed body.

Americans for Responsible Innovation, former Oklahoma Democratic Rep. Brad Carson’s nonprofit focused on federal AI safety regulation, is pushing the task force to “explore the need for Congress to develop new laws that provide for enforceable safety standards and public transparency” into AI development. Voluntary commitments will not be enough, the group argues, and the task force should make specific recommendations to Congress.

Sens. Mike Rounds, R-S.D., and Maria Cantwell, D-Wash., also wrote to the task force asking for more resources for the National Institute of Standards and Technology and its in-house testing lab. They also want the task force to ensure that the Energy Department’s National Labs can test AI independently and to mobilize the technology to guard against cybersecurity incidents.

Meanwhile, the FBI arrested a Saudi national Tuesday for allegedly secretly recording conversations at the offices of his employer, OpenAI.

It’s still not clear what exactly will be discussed at the task force’s first meeting, as the group scrambles to organize following its formation earlier this month.

Industry watchers are awaiting any official guidelines for enforcement of its new directive, which may come from the Office of Director of National Intelligence (headed by task force chair Jay Clayton) and the Federal Trade Commission.

President Donald Trump and Russian President Vladimir Putin’s deal to deliver Russian diesel to global markets may be sending shockwaves through the GOP — but don’t expect it to do the same to prices.

Already, multiple House Republicans; key GOP candidates; and two bipartisan groups of senators have pushed back on the move.

The planned imports will “have very little unnoticeable impact on domestic US diesel prices, even if it happens — and I think that’s a big if,” given legal complications and Russian constraints, Bloomberg economist Chris Kennedy, who served on the National Security Council during the Trump and Biden administrations, told Semafor. He said that the amount of diesel Russia has pledged to release for the month of November represents only “one day of US diesel demand.”

He pointed to heating oil futures, observing that “traders appear to be pricing in very little near-term impact.”

The White House pushed back: One official insisted to Semafor that “massive amounts of supply will lower costs for American farmers, truckers and workers.”

“They’re not releasing that [diesel] to us, they’re releasing it to the entire world,” Trump told reporters Tuesday. “Because the world market suffered with high prices — and when you knock out diesel refineries, that’s not a great thing.”

President Donald Trump is downplaying the idea of cutting off intelligence-sharing with Ukraine, telling reporters yesterday that the US is still sharing intelligence and that “we help them” — while emphasizing that his goal is to see an end to Russia’s years-long war on the country.

But the idea is actively being discussed inside the White House, one Trump administration official told Semafor. And notably, there’s not yet consensus on what to do: CIA Director John Ratcliffe is said to be opposed to the idea.

“Trump is pretty pissed off. He could order it,” the administration official said, suggesting that Trump should end its intelligence sharing specifically for targets inside Russia instead.

Last year, Trump briefly suspended intelligence sharing with Ukraine after a tense Oval Office meeting with Ukrainian President Volodymyr Zelenskyy, who said recently that Kyiv had received no intelligence from partners on a Russian missile attack.

Senate Democrats’ top super PAC is pouring nearly $7 million more into two major races, according to details shared first with Semafor.

Senate Majority PAC, which is aligned with Senate Minority Leader Chuck Schumer, is adding $3.7 million to its campaign in Michigan, bringing the group’s total investment up to nearly $35 million in a must-win race between Democrat Abdul El-Sayed and Republican former Rep. Mike Rogers.

The group is also spending $3 million more in Maine to beat GOP Sen. Susan Collins and aid Democrat Troy Jackson. The new spending comes as the group pauses ads in Georgia and North Carolina, states where Democratic candidates Jon Ossoff and Roy Cooper are favored to win.

The group’s ad campaign this week offers a road map to the battlegrounds: New Hampshire, Michigan, Maine, Kansas, Ohio, Iowa, Alaska, and Texas.

AI may soon be able to self-replicate across internet-connected personal devices in homes, Anthropic warned, raising the possibility of so-called “botnets” that would be difficult to stamp out.

While botnets predate AI and range from harmless to malicious, impending AI swarms could hijack the entire internet, the startup has said. Separately, an Anthropic co-founder wrote that “recursive self-improvement” — a research process whereby AI rapidly iterates upon itself with minimal oversight — could arrive next year.

The warnings drew sharp criticism: “They’re not going to build something that they don’t want to exist,” the journalist Derek Thompson argued, adding that Anthropic’s leaders need to stop acting “like a local news anchor reporting on traffic on the 101, and acknowledge that they are the traffic.”

The IMF warned that “zombie companies” — whose earnings haven’t covered interest payments for at least three years — now comprise more than a fifth of Asia’s outstanding corporate debt, potentially posing a systemic risk.

Zombie firms’ debt share has more than doubled since 2008. “This rising share of corporate debt is increasingly concentrated in firms that cannot service it,” the IMF wrote.

The problem appears to be growing in China: Natixis analysts said that state policies supporting advanced industries like semiconductors aided “their rapid development but not their profitability,” the Financial Times wrote.

In February, the IMF separately warned that Beijing’s state subsidies were producing inefficient firms, with total subsidies amounting to some 4% of GDP.

Bumble agreed to a $1.3 billion acquisition Tuesday that would take the dating app private, after years of falling revenue amid a shift in online dating habits.

Bumble distinguished itself by only allowing women to message first, eventually going public in 2021 at a $14 billion valuation, before scrapping its hallmark rule this year amid declining users.

It might now reinvent itself “away from the pressure of public markets,” but the company’s difficulties speak to “growing dissatisfaction with the familiar swipe-based model,” TechCrunch wrote.

Other dating apps are rethinking their practices: Hinge is experimenting in India with blocking screenshots of dating profiles over concerns they were being used to spread “shame” and cynicism around online dating, WIRED reported.

Iran and Russia are escalating their hybrid warfare campaigns against the UK, the head of MI5 warned Tuesday.

The British intelligence agency is now devoting more resources to state threats than during the Cold War, Ken McCallum said in his annual speech, calling Moscow “aggressor No. 1” and blaming Tehran for a series of sabotage incidents targeting Jewish communities in Europe. The spy chief said that Russia was using hybrid tactics that “stop short, though sometimes not much short, of conventional conflict.”

The EU is quietly preparing for how to respond to a major — and deadly — hybrid attack, Politico reported, while NATO’s top general recently unveiled a “theory of victory” to counter an armed invasion: “block, blunt, and break.”

Nvidia CEO Jensen Huang said he plans to unveil $2 billion in new European investments next week, as the continent’s economic prospects get a boost from AI.

“Europe needs to get in the race,” Huang said. The IMF’s chief economist noted that AI-related exports and investments have given “some countries a cushion” amid geopolitical turmoil, particularly the UK: The fund upgraded the country’s growth estimate. Still, Europe trails at the technology’s frontier.

The US and China have produced 59 and 35 notable AI models respectively, while France and the UK have produced one each, per the Stanford AI Index. Notably, a German search engine used by European governments plans to ditch France’s Mistral, opting instead for a Chinese open-source model.

Ukraine’s leader said he received no advance warnings from Western partners before a Russian missile strike on Tuesday, days after Washington threatened to stop intelligence sharing in a bid to force Kyiv to abide by an energy ceasefire. US President Donald Trump said Tuesday, “We are sharing intel.”

But Trump’s broadsides against Ukraine this week, while agreeing a diesel deal with Russia, obscure Washington’s broader plan to end the war, The Washington Post’s David Ignatius reported. “We need to make the problem and the solution bigger to help both sides see what the postwar situation would be — and then make concessions,” a US official told him.

What Trump fails to grasp is that Vladimir Putin “wants victory rather than a truce,” Ignatius argued.

The Scoop

Lenders are feeling maxed out on data-center debt.

When Volta, an AI infrastructure company, went out recently to raise $5 billion for a data center in Norway, the deal didn’t seem that different from the more than $450 billion in AI-related debt deals done so far this year.

But as Volta’s bankers at JPMorgan and Goldman Sachs went out to sell it, some investors pushed back, saying they’re full up on data-center debt and demanding more security and a higher interest rate. The deal is expected to price later this week with a rate of at least 11%, unusually high for a data-center project, anchored by a $1.5 billion order from Apollo, people familiar with the matter said.

Commitments for the deal are due this week and lenders are still in discussion about allocations, so details about the financing could change.

Volta’s deal is a pulse check on the AI-financing world. Deals are still getting done, but less smoothly than they were earlier this year, with higher rates and more heavily negotiated terms, investors and bankers say.

Volta was founded in February and the Norway data center is its first significant project. Some investors balked at its lack of a track record, while others were unnerved by Volta’s reliance on Anthropic to buy much of the data center’s compute. Anthropic doesn’t share much financial information with lenders and the exact level of its obligations struck some investors as unsettled.

The deal includes an unusual provision to overcome that skittishness: The interest rate charged to Volta will decrease if Anthropic can get an investment-grade credit rating, some of the people said. The Financial Times reported last month that Anthropic’s and OpenAI’s IPO advisers were lobbying credit-rating agencies for blue-chip status, which would be almost unheard-of for companies as unprofitable as both AI labs are.

JPMorgan and Goldman Sachs have also underwritten a $1.3 billion term loan to Volta.

JPMorgan, Goldman Sachs and Apollo declined to comment. Volta didn’t respond to a request for comment. Anthropic didn’t respond to requests for comment.

Know More

September has been the second-lowest month this year for issuance for AI financings, as regulatory and political challenges weigh on data center construction, according to a report from Morgan Stanley. The fourth quarter is expected to slow down further, the analysts said.

President Donald Trump is ramping up his midterm travel this week, hitting five states as he looks to boost GOP base turnout ahead of a likely tough election night for Republicans.

The president has hit the road almost daily this month, holding rallies in a host of states — including Alaska, Arizona, Montana, Georgia, and Kentucky this week alone. All of his stops were targeted to reach media markets in races that Republicans view as competitive, per a GOP official, including an Ohio House race near the Kentucky border.

Trump’s goal remains persuading his loyalists to turn out in an election where he isn’t on the ballot.

He’s not alone in the turbocharged itinerary; Vice President JD Vance stopped in Texas earlier today to tout GOP Senate nominee Ken Paxton, who’s in a neck-and-neck battle against Democrat James Talarico. Vance used his visit to tout new Defense Production Act-related spending by the administration on a Texas refinery.

The battle for Congress is shifting deeper into red territory as both parties deem some races essentially over.

The Democratic group Senate Majority PAC is scaling back ads in Georgia and North Carolina as Republican spending there slows, signs both parties see the Democratic candidates — Sen. Jon Ossoff of Georgia and former North Carolina Gov. Roy Cooper — as increasingly favored to win.

The GOP Senate Leadership Fund is spending more to assist Sen. Pete Ricketts in Nebraska, after boosting spending in Kansas and South Carolina.

And the Congressional Leadership Fund, a House GOP leadership-aligned PAC, is redirecting resources from candidates in purple districts, like those represented by Reps. Tom Kean of New Jersey and Mariannette Miller-Meeks of Iowa, toward GOP incumbents in districts more handily won by President Donald Trump in 2024, like Reps. Monica De La Cruz of Texas and Rob Wittman of Virginia.

Republicans still have some bright spots on the map. Democrats pulled back on some ad spending in another red district in Arizona, and Republicans are still spending heavily to try to flip outgoing Rep. Jared Golden’s seat in Maine.

Oil prices ticked down on Tuesday as Saudi oil executives sought to reassure the market following a major attack on the capital’s airport. International energy bosses were largely absent from this week’s World Petroleum Council Energy Congress, held in Riyadh for the first time, after the Houthi attack. The CEOs of BP, Shell, and TotalEnergies, along with a host of international ministers, including US Energy Secretary Chris Wright, dropped out due to the strikes.

That left a thinner-than-expected crowd, mostly made up of local executives, to hear the kingdom seek deeper international cooperation to secure energy supplies and trade routes. Saudi Arabia can build more pipelines and boost storage capacity, but “no one nation, even one as capable and confident as ours, can safeguard them alone,” Aramco chief executive Amin Nasser said.

His comments reflect the growing role of foreign investors in the region’s energy industry, already expanding even before the Iran war. Long relegated to minor roles, the Gulf energy companies increasingly see international energy firms and global investors as an integral part of their plans to lock in customers for their hydrocarbon exports, invest in their infrastructure, and bind other states into their security in a way that the old expectations of oil for security arrangements have failed to guarantee.

Tim’s view

The contradictory tangle of energy policy actions taken by US President Donald Trump toward Russia over the weekend risks repeating mistakes that he and his allies often slammed his predecessor for.

On Friday, Trump announced the US would waive sanctions on Russian diesel exports until the spring and permit it to release 300,000 metric tons of diesel into the global market, before announcing an energy ceasefire between Moscow and Kyiv.

The diesel deal was quickly condemned by a bipartisan group of senators, who argued that the volume was too small to make a difference — equal to less than a day of US consumption — and extended a “financial lifeline” to Russian President Vladimir Putin. This, they said, contradicted both a 2022 US ban on Russian energy imports and the spirit of the new sanctions law Trump signed last month, which seeks to penalize countries like China and India for the very same kinds of purchases the president is now pursuing. The diesel relaxation, former State Department energy diplomat Geoff Pyatt told me, is “enough of a sweetheart deal to encourage [Russian Direct Investment Fund CEO Kirill] Dmitriev and Putin to keep fighting in hopes Trump will deliver Kyiv.”

As for the “ceasefire,” Russia seems to have violated it almost instantly. A Ukrainian official told me on Monday that Kyiv was temporarily holding off on further long-range drone strikes against Russian refineries while it assessed Moscow’s behavior and was waiting for a chance, potentially later this week, to clarify details of Trump’s proposal with US officials. Axios reported the deal could apply only to refineries, which would make little sense for Ukraine to participate in given that it has only one barely-functional refinery. Kyiv is more worried about the power sector, which a recently leaked Russian military planning document makes clear is still directly in Moscow’s sights.

Dangling a limited ceasefire deal that Ukrainian President Volodymyr Zelenskyy can’t accept sends the same message to the Kremlin as the diesel deal: Ukrainians are the problem in this war, and US resolve in support of Ukraine is barely paper-thin. The past few years have shown repeatedly that accommodating Putin pushes him away from the negotiating table, not toward it.

Trump and his energy officials have criticized Biden often and loudly for authorizing, in 2022, a record release of oil from the Strategic Petroleum Reserve, which they framed as an irresponsible stab at tamping down US fuel prices ahead of an election at the expense of long-term American security interests. They also criticized Biden’s decision in 2021 to relax sanctions on the Nord Stream 2 gas pipeline in the interest of repairing relations with Moscow, which helped embolden Putin to undertake the full-scale invasion of Ukraine. With just three weeks until the midterms, Trump is clearly riled about diesel prices and the slow recovery of exports of refined products from the Persian Gulf. But it’s counterproductive to capitulate to Putin: In addition to the uncountable human toll, a longer war in Ukraine means more energy market distortion ahead.

Notable

• A new poll found that even if Trump managed a political feat like ending the Iran war or bringing down gasoline prices by $1 ahead of November’s midterms, a majority of voters would not be more likely to vote Republican.

It took 58 years for a pioneering Jeddah schoolhouse show to reach Frieze Masters in London. In 1968, two female artists hung their paintings at a school in Jeddah called Dar Al-Tarbia Al-Hadetha, in one of the first exhibitions women had ever held in Saudi Arabia. One of them, Mounirah Mosly, spent the decades that followed — long before Vision 2030 set off a boom in Saudi art — designing Aramco publications, helping run its children’s art competitions, and working dyes, snakeskin, and rope into collages about war and Palestine, until her death in 2019.

This week, her creations go on display at Frieze Masters, Frieze London’s fair for art made before 2000, where a slot reads as a verdict that the work now belongs to history. Jeddah’s Athr Gallery is debuting with Mosly and a second pioneer of Saudi modernism, Abdulrahman Alsulaiman. Her work hangs in the fair’s Feminist Legacies section.

The Houthis firing missiles at Riyadh are not just Iranian proxies — they’re heirs to a 1,000-year-old Zaydi imamate that ruled northern Yemen on and off until the modern state was established in 1962. Zaydism holds that power belongs to the Prophet’s descendants, not elected officials. In an explainer video, Baraa Shiban, a RUSI fellow who sat on Yemen’s National Dialogue before being exiled for criticizing the group’s abuses, describes how, after a 1995 trip to Iran, the group’s founder, Hussein al-Houthi, fused the Zaydi branch of Shia Islam with Tehran’s revolutionary doctrine and built a militia in Hezbollah’s image. The group seized Sanaa in 2014, a decade after its founder was killed.

Rather than replace the state, the Houthis hollowed it out, Shiban said, assigning a “supervisor” to sit over every ministry and neighborhood, extorting businesses, indoctrinating the public, and recruiting children as soldiers. They now rule most of Yemen’s population and sit on one of the world’s busiest shipping lanes.

The UAE and Saudi Arabia accounted for almost 90% of the $2.98 billion that regional startups raised in the first nine months of the year, according to venture capital tracker MAGNiTT. The two countries were also responsible for every round of $100 million or more. Regional funding fell 7%, and the number of deals dropped by a third.

Take out the big rounds and the picture is bleak. Most of the money went to a handful of fintech and logistics companies that have already proven themselves. Early-stage deals have thinned out, which leaves fewer companies ready for growth rounds in 2027. Gulf money is filling the gap that other investors left: Investors from outside the region want to know they can get their money out, and right now that’s hard, with fewer startups being bought.

The IMF cut its 2026 growth forecasts across the Gulf and now expects the Middle East and North Africa to be the only region in the world to shrink this year. In April, the fund still forecast Saudi Arabia and the UAE would grow.

Both will still do better than Kuwait, Bahrain, and Qatar, whose emir said today that government revenue was down 42% in the first half of the year, because they can pipe crude around the Strait of Hormuz to the Red Sea and Fujairah. The fund expects a strong rebound next year, but only if the strait gradually reopens from March, a date it has already pushed back. Oman, whose ports sit outside the strait, is the only Gulf economy still expected to grow in 2026, though its growth will roughly halve next year as Qatar and Kuwait rebound by more than 17%.

Powerful hurricanes killed several people and left thousands without power in the US and Mexico, as experts warned that this year’s supercharged El Niño risked making storms longer and more destructive. The climate phenomenon, which originates in the Pacific and leads to warmer global temperatures, has upended weather across the world, fueling extraordinary storms in the Americas. “It’s been berserk,” an expert told the Associated Press.

Elsewhere, however, this year’s record El Niño has been welcome news: Forecasts for a warmer-than-usual winter have eased pressures on European and Asian economies — including some of the world’s biggest LNG importers — which are scrambling to contain soaring winter energy bills as expanding global conflicts drive up fuel prices.

Key watchdogs indicated they would step up regulation of AI, though the technology’s superpowers — the US and China — showed little indication of increasing their own scrutiny.

Banking regulators on both sides of the Atlantic were increasingly asking questions of institutions’ use of AI models, fearful the technology could threaten financial stability, Reuters reported, while the Financial Times said the UK’s AI minister was readying proposals for compulsory monitoring of frontier technology.

Still, the Trump administration has shown little willingness to step up its oversight of Big Tech, and while Beijing has talked a good game on AI safety, the chip-focused outlet SemiAnalysis wrote recently that “we think China’s real approach to AI safety is speed-based, not safety-based.”

US home sales plunged to a 12-year low after mortgage rates topped 7%, driven by soaring global borrowing costs. Increasing energy prices and higher-for-longer inflation expectations have sent debt costs to recent records, with US bond yields touching a 24-year high and European debt climbing to levels not seen in decades.

Higher borrowing costs are impacting poorer nations, as well: The UN warned several countries were facing a “liquidity crisis” that could push millions into poverty, with developing countries now on average spending 9.5% of government revenues on interest payments, the highest share in a quarter century. “The global economy could soon test the limits of resilience,” the IMF’s chief economist said.

Tech stocks fell on concerns that a historic surge in AI-related shares may be turning, as investors questioned the financing of the huge buildout underway. South Korea’s market — heavily exposed to chip giants Samsung and SK Hynix — sold off sharply, leading a decline in Asian tech shares. Investors appear to have grown wary of investment in AI data centers: BlackRock’s research arm downgraded its outlook for tech-driven US stock markets, an Australian Nvidia-backed data center operator withdrew its IPO, and bond-market investors demanded increasing premiums for debt from tech firms. “A lot of investors have no clue what they are investing in,” Broadcom’s CEO said this week, “only to find out that it’s almost like they are in a casino.”

The global economy will grow more this year than previously expected, the International Monetary Fund said, with booming investment in AI outweighing a fast-growing debt pile — for now. The marginal upgrade in the IMF’s outlook nevertheless represents a slowing in the pace of overall expansion, while the fund also increased its expectations for inflation and warned that a number of buffers, including global energy stockpiles and fiscal capacity, were eroding to worrying levels.

In particular, the IMF said the world’s biggest economies had to take “urgent” action to rebuild their public finances, with deficits at their biggest since the pandemic. “The global economy has been resilient,” a fund economist warned, “but that resilience is reaching its limits.”

Andy’s view

The Australian sinologist Geremie R. Barmé wrote that “autocrats and patriarchs share a fateful dilemma”: Once in power “the countdown to their demise is on.”

Mao Zedong’s long descent into ill health and madness brought China to the brink of civil war. Deng Xiaoping went out peacefully, though the decade before he died was marked by political upheavals, including the Tiananmen Square protests. Now, the Xi Jinping “death watch” has begun.

Of course, the big difference is that today China is at the center of everything.

As it drags on, the Xi “death watch” will become a global spectacle, moving markets, affecting investment flows, and shaping defense priorities. China’s internal risks are now the world’s risks.

Xi’s physical condition is one thing. At 73, he’s visibly slowing; he looked fragile descending the stairs of his plane at Air Base Andrews when he arrived for a summit with US President Donald Trump last month, clasping the hand of his wife, Peng Liyuan, for support. The Wall Street Journal reported that Chinese officials made a highly unusual request for a “hold room” for Xi at the White House where he could take breaks between meetings, and his talks with Trump were surprisingly brief.

But the pressures building inside the Chinese system are largely unseen: Leadership politics, including the health of the top man, are as much a black box today as they were in the Deng era. But we can assume that from now on, everything that happens behind the high red walls of the leadership compound in Beijing will be connected, one way or another, to the vexed issue of how a post-Xi China will be governed.

Political transitions are the midnight hour for all autocratic regimes. But Xi’s dilemma is particularly acute: If he names a successor now to carry forward his policies and protect his legacy, he risks triggering a political knife fight years before he’s ready to relinquish power.

Wait too long, though, and he creates a dangerous political vacuum.

Either way, Xi will have to pick a relative unknown — all the current members of the Politburo Standing Committee are too old to step into his shoes — raising a host of troubling questions. Would a designated successor catapulted to the top be strong enough to command the loyalty of the powerful military? Could he hold the Party together?

Or could Xi himself turn on the chosen one? One of Mao’s designated successors, Liu Shaoqi, died of diabetes and pneumonia in solitary confinement, lying in his own filth. Deng cycled through two successors before settling on Jiang Zemin.

Xi has grown paranoid about those around him, his ruthless purges targeting some of his oldest, and most trusted, comrades. That doesn’t bode well for any potential second-in-command.

China now faces a period of prolonged political uncertainty. Carl Minzner, a US legal scholar and senior fellow for China studies at the Council on Foreign Relations, predicted a “long twilight” with the economy sagging, social discontent rising, and the state using “grid management” — surveillance techniques used to maintain control over Xinjiang and other restive border areas.

A succession struggle is unlikely to remain within China’s borders, Tyler Jost, a professor at Brown University, and Daniel Mattingly of Yale University argued in Foreign Affairs last year, noting that Xi’s prize goal is unification with Taiwan and “if he hears the succession clock ticking, he could become more willing to gamble on war.”

I’m betting that the end of the Xi era will look a lot less like Deng’s, whose passing created hardly a ripple — by then, he’d handed over power and put in place a system to ensure smooth leadership transfers — and more like Mao’s, a drama that involved a bloodless coup (the arrest of the so-called “Gang of Four” led by Mao’s widow), intervention by the People’s Liberation Army, and show trials.

We had a foretaste of this kind of turmoil when Xi took power in 2012. A carefully constructed power transfer was upended by the arrest of Xi’s main Politburo rival, and there were wild internet rumors of a military coup, tanks in the streets of the Chinese capital, and gunfire near the leadership compound.

Xi has wrenched China back to an era of one-man rule. But having attained the pinnacle of power — next year he’ll likely get a fourth five-year term in office — Xi now has to reckon with the consequences for his country. As Deng himself warned, “building a nation’s fate on the reputation of one or two people is very unhealthy and very dangerous.

Notable

• In 2025, during Russian President Vladimir Putin’s visit to Beijing, a hot mic picked up a conversation between Putin and Xi in which the two discussed organ transplants and the possibility of living forever. Musing on such procedures, Putin told Xi (through a translator) that with modern technology organs could be transplanted again and again so that “(you can) even achieve immortality.” While a largely hypothetical conversation, it hinted that staving off old age and death — maybe for eternity — is top of mind among the world’s most powerful autocrats.

The News

Inflation tied to the AI boom is “jumping out of its lane” and starting to push up prices in unrelated corners of the economy, Chicago Fed President Austan Goolsbee said.

“Prices are going up in spaces that are not just components in data centers and the directly adjacent industries,” he said on Semafor’s . “I’m getting increasingly nervous that that’s just straight, old-fashioned overheating demand.”

Prices for land, electricity, water, construction, and electrical components used in data centers have surged. Those spikes don’t appear to have yet hit consumer pain points — for example, the cost of groceries or a haircut — but economists are closely watching how AI’s wealth, from paper millionaires in Silicon Valley to higher-paid construction workers, is being spent.

Fed Governor Lisa Cook warned last month about “some economy-wide pressure from AI-fueled demand” but said that so far the boom looks like “a shift in demand toward AI-related sectors rather than an increase in economy-wide demand.” Fighting that kind of sector-specific inflation with rate hikes “could be a mistake,” she said.

Goolsbee isn’t a member of the Fed committee that sets interest rates, but will join it in 2027. He and other economists have been trying to parse how much of today’s stubborn inflation — 3.4% in August, with September’s numbers due out this week — is from higher oil prices triggered by the war in the Middle East, which the Fed can’t do much about, and how much is coming from hotter demand across the economy for goods and services.

“If inflation remains persistent, then I think it’s clear what the Fed has to do,” he said, when asked whether the central bank should raise interest rates again when it meets later this month.

Liz’s view

The Fed’s problem is that its best tool for fighting inflation doesn’t seem to be denting the demand for AI inputs. Hyperscalers aren’t slaphappy consumers who might be deterred by higher interest rates. They are locked in a must-win battle and don’t seem to mind higher debt costs. Companies like Alphabet and Meta have cash-cow advertising businesses that can support a few extra basis points of interest.

It’s a broader problem for the Fed: Big parts of the US economy no longer respond to rising interest rates. There may be a pain point for the hyperscalers, but it’s likely to be intolerable for the rest of us.

Room for Disagreement

The issuance of new AI-linked debt fell in August, according to Morgan Stanley, which could show investors tapping on the brakes, even if corporate executives don’t want to.

Transcript

Liz Hoffman: Austan Goolsbee, welcome to the show.

Austan Goolsbee: Thank you for having me.

Liz: You are a great communicator in a world of wonks, literally a champion talker. Kevin Warsh wants the Fed to talk less and to force investors to look at the numbers and make their own decisions. What do you think?

I’m an old friend and fan of Chairman Warsh. I worked with him back in the financial crisis. Before he ever got there, I’m uneasy with people expressing what we’re now calling forward guidance, that is saying, “Here’s what I think will happen at the next meeting. Here’s what I think four months from now the interest rate should change.” Most of the discussion about communication seems to have been about that, and I kind of agree with we should phase out that kind of communication. I’m engaged in a demystification project about the Federal Reserve. Here’s what we do. We’re not the bad guys. We’re the Guardians of the Galaxy. I’m going to stay on that for sure.

Liz: Getting to those numbers that you would all like the market to put more stock in and make their own decisions about, even if they were prepared to be weaned off the commentary, does the data that you’re seeing right now lay out a clear picture?

I like how you phrased that. I would say no, not a super clear picture because inflation’s still way too high. I have been worrying publicly about the potential for supply shocks like tariffs, like oil prices to shove us into a stagflationary kind of a trade-off. There is one sense in which it hasn’t been ambiguous. It hasn’t been stagflationary. The job market still looks very stable to me. Growth has been solid, consumer spending solid. We’re falling down on the inflation side of the mandate. But the ambiguity comes, is the inflation getting better on its own as it might if a supply shock kind of worked through or if you had a tariff that was just a one-time increase in the level of prices that should fade away and it hasn’t really been fading away. And you’ve seen inflation in services kicking up and that’s not really from tariffs, that’s not really mostly from oil. So that’s where you start to get the ambiguity in it and it’s not totally clear.

Rohan Goswami: How much of that is AI, which obviously it’s driving a huge investment boom that’s sending up the price of inputs, power, land up. But at the same time, there is this deflationary promise that it’ll make everything cheaper. How do you think about those two things?

This dynamic where there is great promise to come that is factored into massive stock market valuations and massive incentives for companies to engage in business investment. All of those things, the bigger the hype, the greater the chance that you overheat the economy in the short run, that for the day job of the Fed, the more promise there is, the more temptation, the more tendency to spend today based on the promise of what is to come. And that you got to be careful about because that’s just old-fashioned overheating right now.

Rohan: What would a financial unwind of that trade, of the AI trade actually look like from where you sit?

If it’s a discovery that the fundamentals are not there and it’s a bubble, that we have had bubbles in US history in the past, including in the recent past, and their unwinds can get ugly depending how much leverage is associated with those bubbles. It could be more like the popping of the internet. Now, Rohan, you’re not old enough. You don’t remember it, but if you back up, if you’re older than dirt like me, you’ll remember we had an experience with the internet that they were building out the infrastructure premised on growth rates of 20% per year. And when the growth rate came in, well, it’s only going to be 7% per year, that’s still a pretty strong growth rate, but they were massively overbuilt. And so we kind of had this overhang. That’s slightly different than... Finding out the fundamentals are different is slightly different than just a old-fashioned bubble in my view.

Liz: But Alan Greenspan, I think, said basically that the Fed cannot deflate a bubble in real time without making life miserable for everybody else. Do you think that’s still true?

There is a very significant debate among economists about the question, should the Fed try to prevent bubbles, pop bubbles, just clean up after the bubble pops? All of those things. Anybody citing the 1990s and Alan Greenspan, it’s worth at least just going back to give yourself a refresher on the history because it’s not near as straightforward as how a lot of people want to remember it. It is true that in the mid ’90s, Alan Greenspan identified that he thought productivity growth must be accelerating, but people didn’t know that. It wasn’t showing up in the data yet when he said that. He concluded because he said, “Look, growth is giant, profit margins are really high, but inflation is not going up. It’s very tame and is going down, so there must be productivity growth.” And he concluded we don’t have to raise rates if we’re getting this unexpected productivity growth.

But by the end of the ’90s, you’ll remember it then started showing up the productivity growth and the stock market valuations began soaring and actually the FOMC began raising rates quite significantly in a short period of time. You might not attribute that to trying to pop a bubble, but there were certainly people at the time who said that’s what popped the bubble was that they increased the rates. But the Fed’s expression, if you go back and read the transcripts, they’re just nervous that the economy’s overheating, that inflation is starting to kick up, the unemployment rate is so low and the business investment is so high that they didn’t really feel like they could do anything other than raise the rates.

Liz: As you said, the Fed has two jobs, keeping inflation low and steady and maximizing employment. What does maximum employment even mean if we have a hundred million robots like Elon Musk says we’ll have doing all the jobs?

Oh, geez. Look, these are some deep questions. I will say when I see the technology people, look, they’re really good at their job and what they want is to become economists and they’ve been-

Liz: Well, you make it look so fun, Austan.

They’ve been a lot. Look, it is fun. I see why they want it. I see why they want it. It strikes me that they don’t realize that people have been saying this about technologies for hundreds of years. So many people have said it. We even have a name for it. It’s called the lump of labor fallacy, that all labor is just a lump that cannot move. And as soon as the machines are better than this lump, then everyone will be out of a job. If you asked me to take the over under on will the unemployment rate be 40% in 10 years, I’m taking the under. In a way, I feel like the technology people make more Draconian forecasts almost as a way of bragging about how good their technology is. So it’s like they want to use as a proof point. “My AI algorithm is so good, it’s going to replace everyone’s job.”

It’s going to change a bunch of jobs, but it’s also worth remembering this happens all the time. If you go to the Bureau of Labor Statistics, the average person by age 50 has had 13 different jobs.

Liz: How confident are you in the future of being an economist?

Not 100%.

Liz: That’s about where I am a journalist.

Rohan: That is the sort of high end of the market, the academic side of the market. But there was a McKinsey report a few weeks ago that predicted, and it’s a consultancy, but still, that 16 million US workers, around 10% of the workforce, and that’s primarily low income workers, should be prepared at some point in the next few years to switch their jobs because of AI. And I’m curious what you think the right policy response is if that does come to happen.

I thought you were making some joke. Is the right policy response to a consultant report saying to hire a consulting firm to come look at it? No, probably not.

Rohan: No.

That’s probably not the outcome. Look, the speed at which new technologies displace skill sets of specific workers, as I say, matters a lot to how difficult it is to adjust to the new technologies. Now that said, I liked how you phrased this McKinsey finding that they’ll have to find new skills, tasks, or something in their jobs. I would be puzzled. I’m going to go look at it. A lot of the AI use cases that are trumpeted are knowledge work kind of cases. They’re not low income work.

They’re not in the healthcare space, for example, going in and taking care of people. They are high level knowledge work, reading radiology scans and things like that. So I could be wrong. And I want to just re-highlight, by age 50, right now, these are in the data up to 50 year olds now. So before there ever was AI, 13 jobs people have had, they’re constantly thinking, where is their demand in the marketplace? Where can I build a good career? And they’re moving from thing to thing. So they’re probably right that AI, like computers before it, like a bunch of other technologies before it, and going back farther, the introducing radio, introducing telephones, introducing electricity, introducing a whole bunch of big general purpose technologies did change both the economy and the labor force. But in no way did it lead the unemployment rate to head to 100% because it happened at a speed at which the new people coming out of school, they’re going to try to figure out.

They have every incentive to try to figure out what are the technologies not replacing. And that’s the stuff that we want to focus on, the messier jobs.

Liz: But we want people to have jobs because otherwise they couldn’t buy things and the demand side of the economy would collapse. What about a world where, and there’s some emotional reasons we like people to have jobs because of sense of purpose. It’s what we do all day.

Wow, that was really clinical right there. We want you to have a job, son.

Liz: But I guess I’m asking what about a world where the economic benefits of labor get divorced from actually having a job where we tax the AI, we send everyone a check, the demand side of the economy holds up just fine. Should the Fed care about that?

Nobel Laureate Robert Fogel or John Maynard Keynes each had a theory that as time goes by and we get more and more productive, we’re going to work less and less. So if we came back in 30 years and people were working 10 hours a week at a massively high productivity because they had all these robots supporting them, so their hourly per hour of work income was high enough to satisfy consumption, should the Fed care about that? Only to the extent that they would, if you’re going to maximize employment and what everybody interprets as employment is working 10 hours a week, then fine, that’s the world we would be in. We’re not in that world right now. And I think with the unemployment rate barely above 4%, and that’s for where the majority of people are working full time, that is my conception of what the full employment benchmark should be.

And all of the rest is just speculation. So I’m not going to speculate about what the job market is going to be in 10 years, except to say for the people who say it’s going to cease to exist, I kind of think you got 500 years of history that say that’s probably not true. No, maybe this is different from all the others, but I kind of also want the folks saying that whatever laws of economics from the last 200 years of industrialized society do not apply. I kind of need them to acknowledge that in the last 10 to 15 years, this is like the fifth time that they’re saying that. We had the blockchain was going to revolutionize and change everything. NFTs were going to change it.

Liz: You mean you’re not living in the metaverse?

No, I’m not on the metaverse. I’m not riding a Segway everywhere. Remember the Segway was going to change cities for 15 years. We’ve been hearing that within three years, self-driving cars would eliminate every single professional driver in the economy. And it may still happen, but it didn’t happen in three years as they were predicting at that time. And I would just, again, point folks to the history of general purpose technologies. It takes a long time for those to work their way through the economy. And if they don’t happen in a two-year period, we adjust. And I’m not making light of sectors who are directly impacted. If coders coming straight out of college are replaced or have to change what they’re doing, it can be for sure traumatic and adjustment. And if you look at old people like me, if you’re in your 50s, 60s or beyond, can you keep up with the new technologies?

That’s again, a dynamic that we have seen before in the US and around the world. It comes with transition costs, but it doesn’t blow up the economy and it doesn’t blow up the labor market. So if I had to bet, again, like I say, I would take the under on what the unemployment rate is going to be in 10 years.

Rohan: Let’s forget about 10 years. Let’s talk about today, which is I know where you want to go. We’ve been in a sort of low hire, low fire world for some time. Is that fine?

No, it’s not fine. It’s not fine, but there’s nothing the Fed can do about it or there’s little the Fed can do about it. It’s weird, and I like that you raised it. It’s worth just taking a beat and emphasizing how odd such an environment is. If you have low hiring, you usually have high firing. And the reverse, that’s the business cycle. My explanation has been that’s a thing that characterizes uncertainty, that in uncertainty a business would say, “We’re definitely not going to hire anybody new, but we’re not going to get rid of these people either because what if we got rid of them and then we resolve the uncertainty and now we’re going to have to go out and try to hire them.” But I’m going to have to revise my view. I still think that’s true. That does characterize uncertainty, but it can’t be uncertain forever.

And that’s why in your question, you said it’s been going for a long time. If that goes for five years, then I kind of think I’m going to need a rethink of was it uncertainty.

Liz: So that’s one half of the mandate, employment. You talked a little bit about inflation at the top. How much of what we’re seeing do you think is sort of pure AI? How much is the oil shock from the Middle East, and how much is inflation from the post-pandemic era that never went away?

I don’t know the percentages, but in my heart, I’ve wanted it to be from the supply shocks because they’re supposed to go away. The fact that the services inflation is inflated and kind of going the wrong way makes me think there might be more to it than just the supply shocks. And the part that’s coming from AI, I’m getting increasingly nervous that that’s just straight old-fashioned overheating demand. I don’t think that it has overheated demand in the aggregate sense, but it’s starting to. So I was just in downstate Illinois, met with the Illinois Manufacturers Association, went by University of Illinois, talked to a bunch of business people. Everybody’s got a concern about cost, about prices. There’s nothing about ‘demand is not there.’ So it sounded very much like overheating and/but a lot of it is competition for factors, resources, et cetera, competing against the data centers.

So they’re like, the cost of construction is crazy because we can’t get any electricians. We got a one-year waiting list for all these different kind of electrical component parts, and that’s because of the data centers. To the extent that data centers are up and everything else is down, that’s not aggregate overheating. That’s a change in the relative composition. And you can see why it’s going to agitate people, but that’s slightly different than overheating.

All of that said, this is starting to feel like aggregate overheating, that the AI data center cost increases are jumping out of its lane, that prices are going up in spaces that are not just components in data centers and the directly adjacent industries to data centers, that you’re seeing, if you start to see more of this spreading into general services, that investment goods are just getting GDP growth up faster than potential and generating this kind of spillover inflation, that’s problematic because unlike supply shocks where we tend to assume they’re going to go away on their own in a relatively short period of time, nobody thinks that of overheating demand. It takes a long time for overheated demand to get going, and once it’s going, it’s hard to get rid of that. So that’s why the conventional wisdom among economists has been if you see overheating demand, you act decisively and you act quickly to prevent that from rolling into inflation expectations, rolling into people taking for granted that it’s never going to go away.

Liz: Okay. Well then the big question is, should the Fed keep raising rates?

So back to some forward guidance. Look, as I always say, I don’t like tying our hands. When the dot plot came out, I know what my own dot is. I’m one of the most optimistic people in the dots that if we can just show that we’re on path back to 2%, we don’t have to actually have gotten to 2% inflation, but that was a realistic path back. I think the ultimate settling place for rates is someplace a fair bit below where we are right now.

Now that said, I’m not a voter. Chicago’s not a voter in 2026. I was a voter in 2025. I will be again in 2027. At the end of ’25, I dissented against the rate cut because if you go back and look at what I said, I believed that we could get back to path to 2%, but I was not comfortable assuming that this was going to be temporary, transitory, and just cutting preemptively the rates, assuming that it was going to go away.

I wanted to see some evidence that it was actually going away. And that was the meeting, you’ll recall, when the government was shut down, so we didn’t even have any data. I don’t regret dissenting at that meeting because we have had persistent inflation ever since then. So if inflation remains persistent, then I think it’s clear what the Fed has to do. If we can get some evidence that this tariff inflation is going away, that the oil shock inflation is going away, it’s not too much progress that we need to show, but we need to start showing some progress if we’re going to get back on the kind of rate cutting path that we were on.

Liz: But is the Fed’s primary tool, interest rates, still as powerful as it used to be? A lot of froth, you’re talking about this overheating, a lot of it’s coming from big tech companies-

That’s a good question.

Liz: ... which seem totally immune to the cost of borrowing for the moment.

Yeah, look, it’s an important question. I don’t totally know that we have an answer to that. I’ll give you a couple of places where it’s pretty clearly the transmission and short-run effectiveness have gone down, and that is if you back up not that many years, a large fraction of mortgages were adjustable rate mortgages. So when the Fed changed rates, if it translated into mortgage rates, it did so kind of quickly and that became a channel of transmission. Now the overwhelming majority of mortgages are 30-year fixed mortgages. So when the Fed changes the overnight interest rate, the impact through the mortgage channel is reduced.

That said, if the aggregate economy is overheating, the Fed has to use the tools that it has, and the tool it has is the interest rate, and normally it works because the most cyclical industries are also the most interest-rate-sensitive, and those are housing construction, consumer durables, business investment. One part of the AI landscape is about massive business investment. So far, it hasn’t been very interest-rate-sensitive, but it does seem like they’re getting more debt-financed in these investments. So if it were really overheating and the Fed started driving up rates, I think the cost of investment would get more expensive. There’s always collateral damage.

Liz: But boy, is it going to be wildly unpopular if in the hopes of finding the pain point for these big tech companies, the interest rate at which they will actually change their behavior just becomes intolerable for the rest of us, that if AI is so existential for these companies that they are just going to keep borrowing and investing until mortgages cost 15%, that doesn’t seem great.

Yeah. Look, I agree with that. I agree with that. But in a different way, if you were a person who was really into your own popularity, why would you choose to be a central banker? That’s the dumbest job you could ever have. The biggest majority of Americans say they don’t know what the Fed does but they think it’s doing a bad job at it. And so the law tells us what the job is to maximize employment and stabilize prices. And I like to emphasize, notice there’s nothing in there that says make sure the stock market is happy and there’s nothing in there that says make sure the bond market isn’t surprised or make sure the president or the Congress or whatever.

Our job is to look at the state of the economy, and you can see in the minutes and you will see in the transcript when it comes out word for word, that is what happens at the FOMC meeting. People take the job extremely seriously and it’s all about the economy.

Now that said, as I indicated about the AI heating up, I don’t actually think that they’ve driven the output of the United States much higher than potential so far at this point. And the unemployment rate is 4.2%. We just went through a period where it got down into the lower threes. So I don’t know that this is exactly what overheating looks like. And I am hopeful that the supply side can heal itself and we can kind of go back to what the economists call the divine coincidence, is that normally trying to minimize inflation, not minimize, trying to hit your inflation target while maximizing employment, they’re not in contradiction. You have one tool, but they work together. And so I’m hopeful we’re going to get back in that kind of environment.

Liz: Milton Friedman, I think, had this great analogy for central banks about the fool in the shower who’s constantly scalding and freezing himself by turning the knob faster than the water can adjust. How do you think about the line between being too twitchy and being too slow?

One of the harder degrees of difficulty is to get the timing right when there are moments of transition. It’s not clear we’re in a moment of transition, but that’s what we’re trying to figure out. I lean toward the steady hand and away from the twitchy. I think it’s clearer that way. As you know, I was a protege and friend of Paul Volcker and worked through the financial crisis with him. And his line, which I try to follow, is he was speaking about the market and he said, “Let’s remember, our job is to act and their job is to react and let’s not get the order mixed up.” And I kind of think if you look at the actual interest rate, it smoothly goes like this. And if you look at the market projection of “what do they think the interest rate is going to be,” it kind of goes like this. And it’s better that that is not the Fed, because I kind of fear if the Fed was doing this, then the market would be doing this, rather than turning itself into the smooth part.

Liz: But you’re getting at, I think, another metaphor I’ve always liked about central banks, which I think is a Mervyn King thing, a Bank of England, the Maradona theory of interest rates, which goes back to this goal that Diego Maradona had scored against England in the World Cup, and that he kind of just went straight down the field and the defenders were all expecting him to zig and zag. And so they were trying to zig and zag, and he actually just took it all the way down and scored. And I think that’s kind of the argument you’re making here.

And he just went straight down the mill.

Liz: Straight down the field.

Yeah. Look, I think that’s argument. Mervyn King is an interesting guy. When you can pull that off, that’s the best of all because it’s in a way predictable. The difference between soccer and central banking is it’s not a zero-sum game. We can do this thing together. Let’s all hold hands, get back on the golden path, get inflation headed back to 2% with full employment. Rates, I think, can come down if we could get some evidence that we’re on that. But the more you see services inflation going up and the more you see AI demand jumping out of its lane and overheating the rest of the economy, then it’s going to be a little dicier.

Rohan: You’ve made this point before that there’s nothing in your statutory mandate about weighing the bond market or the stock market in your decision making, but at the same time, how do you weigh the job that you have versus the risk of sparking a market crash or correction?

As long as stable employment, maximum employment, and 2% inflation, the market does not think that that warrants a crash, then good for the market. But the stock market is not the economy. And I always cite the example because it happened on my mom’s birthday in 2020. So I’ll always remember, it was on May the 8th, 2020. That was the day they announced the jobs report for April, that the economy had lost 20 million jobs in a single month and the stock market went up that day. So is that because the stock market thought it was going to be even worse? Is that because... Who knows? We can go way deep into the hall of mirrors to try to figure out the psychology. Our job is to think about those two things. It’s not to think about whether the stock market is going to be upset or what they felt about the dot plot or any of those things.

Liz: So you’re not afraid of the bond vigilantes is what you’re saying? They don’t keep you up at night.

Look, we monitor financial stability. In periods where interest rates rise rapidly, you often see things break in the financial system. So we always got to think about those, but I don’t believe in fiscal dominance over the monetary authority and I don’t believe in financial dominance over the monetary authority. We have our job given to us by the law. We have to do our job. And if knowing that we’re going to do our job changes your behavior, then that’s what it is. If we start basing what we’re going to do on what they think we’re going to do, you can get yourself tied up in a pretzel.

Rohan: Switching gears a little bit. Do you think that the hyperscalers with increasingly longer dated debt are starting to compete with the US Treasury for investors’ money?

It’s an important question. When I’ve talked to people in financial markets about that, there are widely differing views. Each very strongly held. As you know, the history of the question, does the amount of issuance of treasuries in a short period affect the interest rate? And if so, by how much? That is already controversial. So if you’re of the view that the last however many years in which the US debt has gone up a lot and the interest rate hasn’t gone up that much, then it’s a puzzle why. In a way the closest substitute to treasury debt is more treasury debt. Why having extra treasury debt did not increase the interest rate, but having hyperscaler debt of a similar duration did increase it? I don’t think we know the answer to how much it is. There’s a plausible case to be made that it would have some effect because the flow does matter.

But are people really attributing that AI data centers are the same or similar credit to US treasuries? Those don’t seem like perfect substitutes.

Liz: I don’t know, but there were times in the last year that Microsoft bonds traded tighter than treasuries, and certainly-

You have a point.

Liz: ... some group of investors will look at Satya Nadella and think that is a more stable and predictable management team than the one in the US government.

You’re getting me way out of my lane. I have no opinion. I have no opinion. The fiscal policy of the country, they can do whatever they want. I always say our Midwest thing is there’s no bad weather, there’s only bad clothing, and those are just weather conditions. You tell us what the conditions are and we’ll pick the right jacket.

Liz: Okay. It feels like a great place to leave it. Listen, thank you so much, Austan. This was really fun.

Rohan: Thanks, Austan.

Hey, it was great to see you and thanks for having me.

Liz: We’ll see you soon.

More Americans believe that the Democratic Party is better positioned than the GOP to ensure the US remains prosperous and to protect the nation against terror attacks, according to new Gallup polling that underscores Democrats’ advantage on image ahead of the midterms.

Forty-three percent of Americans view Democrats favorably, compared with 35% who view Republicans positively; importantly, Democrats have a solid advantage among independents.

Slightly more than half of Americans say Democrats would do a better job keeping the country prosperous, while only 37% believe Republicans would — the largest lead Democrats have enjoyed on this question in nearly 20 years.

Americans are also more likely to view the GOP as too conservative than they are to view the Democrats as too liberal, and view the MAGA movement less favorably than the Democrat Socialists of America.

The newly minted Super Intelligence Task Force is telling AI companies to report and immediately remediate any instances of rogue behavior involving their products, a rare effort by the Trump administration to exert more power over the firms developing the advanced technology.

An Anthropic incident in which a testing model submitted visa applications, according to a State Department spokesman, spurred the task force’s first “action,” which it’s referring to as a “notification and remediation process.”

Frontier AI labs largely do this sort of disclosure and incident reporting already, and Trump’s task force has not laid out exactly what will count as an “incident” that must be reported going forward.

Still, the administration’s decision to make an example of Anthropic is likely to trigger more disclosures than before.

“Our message to all SI companies is clear: delayed notification, inadequate corrective action, and a failure to take responsibility will not be tolerated,” task force leaders Jay Clayton, Andrew Ferguson, Scott Kupor, and Emil Michael said in a statement.

The effectiveness and scope of the new requirements will depend in part on how the task force defines an “incident,” how quickly it must be disclosed, who it must be reported to, and the consequences for not doing so. Officials have yet to lay out these details, and companies are seeking more clarity.

Anthropic contacted the task force to disclose the latest incident and has a history of reporting security episodes publicly and tweaking models to prevent more harm.

Kimberly Guilfoyle’s future as US ambassador to Greece is in question following misconduct allegations, multiple sources tell Semafor.

“I think [Secretary of State Marco] Rubio has had enough,” one Trump administration official said. “Question is, has [President Donald Trump], and will he sign off on it.”

Trump on Monday alluded to his own frustrations over the reports, which include allegations that Guilfoyle tried to solicit money from a donor to pay off her credit card ahead of her confirmation process (Guilfoyle has denied the story).

“We’re looking at it,” Trump said, when asked whether he’s spoken to Guilfoyle and if he’s considering firing her. “We’re not happy.”

Guilfoyle, one person familiar with the situation added, has been making calls to various figures in Trumpworld for help amid the drama.

Ben’s view

On May 13, 2022, then-White House Middle East envoy Brett McGurk asked his boss how he liked his job. Joe Biden, he’d noticed, had been a chatty, expressive vice president, but had grown quieter in a way that wasn’t just about his age.

“There’s no joy in it,” Biden responded. “That’s the difference. No joy in this job.”

McGurk’s new memoir cataloguing two grim years of trying to negotiate between American and regional officials is, among other things, a set of portraits of miserable world leaders:

• There’s the Saudi Crown Prince Mohammed bin Salman, who “seemed annoyed to be there” when the Americans showed up to ask for help with oil prices.
• Palestinian President Mahmoud Abbas, pressed by Biden to negotiate, “seemed lost, used to meetings that started nowhere and ended there.”
• Egypt’s President Abdel Fattah el-Sisi “looked down at his shoes shuffling on the carpet” as “something was weighing on him.”
• Biden took out his own irritation on the short-lived Israeli Prime Minister Yair Lapid, telling him, “Don’t be a phony, man.” Lapid, in turn, “recoiled.”

And so on. In McGurk’s account, only the “smug” and inscrutable Benjamin Netanyahu isn’t obviously unhappy.

This narrative of the woes of leadership could serve as a cautionary tale for the few dozen men and women in both of America’s political parties currently searching their souls and consulting their spouses about whether to run for president. Journalists typically treat these deliberations as theater. But even the people most obviously preparing to run take them more seriously than you’d imagine. Win or lose, a candidate’s campaign will consume their life and their loved ones’; a victory guarantees their life will change forever.

So while Vice President JD Vance’s aides right now appear quite confident he’ll run, they also sincerely believe that he hasn’t yet — totally — decided. Vice presidents are special: They have already paid the price of national office, getting far less in return than their bosses. But one Republican elder who likes Vance is advising against it: He suggests Vance return to Ohio, get to work reinventing trade education or some other worthy task, and run for president as the guy, rather than Donald Trump’s shadow.

Secretary of State Marco Rubio’s supporters, meanwhile, swear he hasn’t taken any steps toward running, much less decided on it. They also caution people against saying he’s not running, however: He hasn’t decided anything.

On the Democratic side, we assume they’re all running — California Gov. Gavin Newsom and Illinois Gov. JB Pritzker, Sens. Jon Ossoff, D-Ga., and Cory Booker, D-N.J., and the rest.

But they might want to read McGurk’s book and think about whether they really want the job. Because oddly, of all the distinguishing qualities of successful presidential candidates, ambition turns out to be perhaps the most salient.

One former Biden administration official recently quipped that their money was on Maryland Gov. Wes Moore for the Democratic nomination, because he has the single quality you most need to become president: really, really wanting to be president.

Room for Disagreement

The potential candidates will also hear more cynical arguments in favor of running no matter what. ABC News observed in 2024: “there are also a lot of benefits, even if you lose: better job opportunities, increased public profiles and the chance to build up a war chest for the next run.”

The News

New controversies concerning the Trump administration’s immigration enforcement and foreign lobbying aren’t steering Democrats away from their focus on affordability in the final three weeks before the midterms.

“Billionaires are better off, but certainly the average people living here in Bucks County are not, and so people are tired of it,” said Bob Harvie, a Bucks County commissioner running to unseat Rep. Brian Fitzpatrick, R-Pa., in one of the swingiest districts in the country.

Harvie is trying to link Fitzpatrick to Trump and national Republicans, though the incumbent has maintained an independent streak in Congress, including by voting against Republicans’ domestic policy megabill.

Following last week’s ICE shooting in New York, Harvie said, “what people see is a government that really is run through chaos, which is what Donald Trump specializes in, and Brian Fitzpatrick sits and watches it happen.”

Fitzpatrick’s campaign did not respond to a request for comment.

Know More

Democrats have previously come up short in trying to defeat Fitzpatrick, who is one of the few House Republicans representing a district won by Kamala Harris in 2024. But Democrats hope national headwinds against Republicans will flip the seat; they also see Harvie as having a key advantage, given he’s better funded than previous challengers and can draft off support for Pennsylvania Gov. Josh Shapiro.

“I think there are definitely people who are tired of Fitzpatrick’s act. They realize that you know he’s not independent,” said Harvie. “He basically does what Donald Trump needs him to do.”

In a show of support from party leadership, House Minority Leader Hakeem Jeffries appeared with Harvie over the weekend. Harvie said he’d support Jeffries for speaker next year: “I’m looking forward to having somebody in the leadership role for this party who’s going to move us forward and focus on the issues that matter to people.”

Drivers in three key swing states are about to see even more billboards blaming President Donald Trump for rising prices, according to details shared first with Semafor.

Home of the Brave is nearly doubling its billboard campaign in Michigan, Ohio, and Iowa, adding $1 million in new billboards on top of the $1.25 million the group already spent.

The new plans bring the group’s total billboards across those three states to more than 350. The billboards hit Trump for higher grocery prices, ding Republicans for supporting Trump’s tariffs, and link gas prices to the unpopular Iran war. They’re intended to help Democratic Senate and House candidates that will determine congressional control.

“Job number one is winning back Congress. Once we do that, we can start finally holding this administration accountable,” said Home of the Brave advisory board member Sarah Longwell.

More than 5% of equipment and materials supplied to US chipmakers originate in China, which also possesses some 90% of the rare earths required to manufacture semiconductors, a new report showed.

The figures highlight the structural reliance of US tech on China, and the difficulties of erecting a materials and software firewall against Beijing. “We’re so deeply intertwined,” Brookings’ AI specialist Kyle Chan told The Washington Post: “There’s a lot of actual dependency.”

Beyond materials, the US tech startup ecosystem also relies on cheaper, open-source Chinese AI, so much that when the Trump administration considered banning it, nearly 300 US firms spoke out — marking “the moment open intelligence itself becomes a geopolitical dependency,” an analyst wrote.

“The word fear in the Saudi dictionary does not exist,” Saudi’s energy minister said Monday at a conference skipped by top oil executives, as back-to-back Houthi strikes on Riyadh’s airport threaten the kingdom’s economic ambitions.

“Efforts to project a business-as-usual calm look strained,” Semafor’s Saudi bureau chief wrote. Saudi’s push to attract foreign investment and tourism is facing setbacks, with limited travel options for its upcoming flagship business event: The main airport is closed, some governments advised against traveling there, and Delta delayed plans for nonstop service to Riyadh.

Saudi has poured money into global tech and AI projects, The Wall Street Journal noted, and how it responds to this crisis “will have consequences that stretch well beyond the kingdom.”

Meta released its latest Muse model on Monday, as CEO Mark Zuckerberg said his company had reached the “frontier” of AI capabilities.

“Getting to this point both required a large amount of compute and investment,” Zuckerberg told the Financial Times, vowing to spend more. The tech giant last year invested $14.3 billion in Scale AI, whose founder became Meta’s AI chief. Muse is now the most downloaded app in the US, prompting OpenAI to unveil a competitor agent tool.

Zuckerberg, who helped craft the White House’s self-regulation protocol, also rejected calls to slow development, underscoring the split among Big Tech executives over safety: Milk cartons are more “subject to safety rules” than AI, Microsoft’s president told the BBC.

A cyberattack, affecting at least 400 French supermarkets overnight, raised refrigerator temperatures to more than 122°F (50°C) in some cases, forcing millions of dollars’ worth of food to be discarded Monday.

“The weaponization of food has become a reality,” the EU commissioner for agriculture said. The scale of the hack demonstrated “a certain level of sophistication,” a cybersecurity consultant told AFP.

The Élysée has recently called to harden France’s digital infrastructure amid rising security breaches. Monday’s attack may have been continental — a Dutch supermarket chain operating in several countries reported network outages at distribution centers Monday, with one source telling Dutch broadcaster RTL, “You’re going to see huge gaps on the shelves in the coming days.”

US President Donald Trump defended his deal with Moscow to suspend export sanctions on Russian fuel, calling it “the right choice” and accusing Europe of hypocrisy for continuing to import Russian energy.

Both Republicans and Democrats have criticized the agreement, which could direct some $4 billion in US funds to Moscow. The EU’s top diplomat said it was “not the time to ease pressure on Russia, and Europe won’t.” The bloc unveiled its largest sanctions package to date on Monday against entities accused of supporting Russia’s war efforts.

“Having lambasted India and China for buying Russian oil, and threatened sanctions over their purchases, Trump is now seeking to facilitate Russian diesel exports himself,” the Financial Times’ editorial board wrote.

by Jason Horowitz.

When he moved to Italy, Horowitz, an American who grew up in Queens, was sure that the country’s best days were behind it. But by covering neofascism, financial crises, immigration, and other topics for 25 years — a portion of which he spent as The New York Times’ Rome bureau chief — he found that Italy’s problems were a harbinger for the rest of the industrial world.

Horowitz’s love for Italy gives the book “its charm and its instructive value,” Kirkus Reviews wrote, describing it as “a mix of forewarning and reassurance from someone with a distinct viewpoint.” Buy The Italian Job from your local bookstore.

Ecobank agreed a partnership with China’s payment system to enable transaction settlements in the yuan currency. The Togo-based bank, which operates in 34 African countries — more than any other continental lender — will sign an agreement this month to join the China Interbank Payments System (CIPS). South Africa’s Standard Bank and the African Export Import Bank have taken the same step in the last year.

The move follows increasing demand from businesses on the continent to transact and settle deals using China’s currency. An 18% rise in China-Africa trade last year — marked by a surge in the continent’s imports of Chinese solar power equipment — underscored the growing commercial relationship between both parties, highlighting the appeal of financial systems that make transactions easier to complete.

China this year removed tariffs for imports from all African countries except Eswatini. Its move to increase bank integrations with its payments system furthers a push led by the BRICS bloc against the US dollar’s dominance in international trade.

The forces of US private security contractor Erik Prince suffered major battlefield losses in DR Congo last month, a new report found, calling into question his controversial firm’s actions in the country.

Prince, employees of whose previous company Blackwater carried out a civilian massacre in Iraq in 2007, has focused on expanding his presence in the central African nation — where the army is fighting Rwanda-backed M23 rebels — to curry favor with US President Donald Trump.

DR Congo has sought to speed up the implementation of a strategic mining partnership with Washington, which is looking to rival China’s access to critical minerals in Africa. However, insecurity remains a major challenge in the country.

Prince’s forces have been deployed to secure mineral-rich areas and curb smuggling to provide investor-friendly access to conflict-hit areas. DR Congo, the world’s largest producer of cobalt, a key component in electronics, has already received US investment under the agreement and is looking to attract more Western funds.

Saudi Arabia plans to expand its oil pipeline network to cut its reliance on the Strait of Hormuz. Energy Minister Prince Abdulaziz bin Salman said today that a gas pipeline is being converted to carry crude as well and could move around 1 million barrels a day within eight weeks, rising to 3 million with further investment. “We may end up with 10 million barrels of pipeline within two to three years, that can divert oil to a different destination,” he said, adding that the government, not Aramco, is footing the bill.

The urgency is growing as wars in the Middle East and Ukraine strain global oil supplies: Goldman Sachs raised its year-end oil price forecast over the weekend citing thinning inventories. But Iran is “not likely to stand by” as new export routes emerge, experts at the Center for Strategic and International Studies warned.

Mubadala Investment Company is turning to Asia’s growing consumer markets and technological advances as it looks to keep up the prolific dealmaking of recent years. The $385 billion Abu Dhabi sovereign wealth fund is looking to boost investments in China, India, Japan, and South Korea, with plans to deploy about 10% of its assets each year globally, Chief Financial Officer Carlos Obeid said at the Milken Institute Asia Summit in Singapore last week. The energy transition, technology, the restructuring of global supply chains, and evolving consumer behavior are Mubadala’s four focus areas, he added.

Last month, the world’s most active sovereign wealth fund bought a minority stake in Luckin Coffee, which may bring the Chinese chain to Abu Dhabi. About a quarter of Mubadala’s portfolio is at home in the UAE, where it has brought brands like Four Seasons and Cleveland Clinic, as part of its mandate to draw global players into the domestic economy, some through private equity investments.

The Scene

Israel has produced more tech unicorns per citizen than any country in the world, twice as many as the US. Ittai Ben-Zeev’s job is getting them to stay there.

The CEO of the Tel Aviv Stock Exchange is tasked with convincing the next Wiz, Monday.com, and Fiverr, which all went public in New York or sold to US rivals, to list at home instead. He’s also courting global investors whose money will help boost trading and valuations.

His biggest tailwind, he said, is the takeover of US markets by a handful of AI giants. Israeli startups worth a few billion dollars can’t get the attention of investors rhapsodizing about trillion-dollar IPOs from SpaceX, Anthropic, and OpenAI.

“New York is no longer an option,” said Ben-Zeev, the exchange’s CEO since 2016.

After the Oct. 7 attacks, 7% of its workforce was called up for military service and the bear case for its stock market was obvious. Since Oct. 8, 2023, the TA-125 has beaten the S&P 500 by 50 percentage points and the tech-heavy Nasdaq Composite by 23. The country is on track this year for a record 30 IPOs. Foreign holdings of Israeli shares more than doubled from September 2023 to the beginning of this year.

Ben-Zeev dismissed wartime nationalism as a reason for Israeli founders to list at home, or for Israeli investors to buy their shares. “Israelis will be patriotic about certain issues, but that’s not the way they view the exchange,” he said. But he said the Jewish diaspora has increased its investments. Bill Ackman and his Israeli-born wife, Neri Oxman, bought 4.9% of the Tel Aviv Stock Exchange in 2024 after a 45-minute meeting with management, Ackman said in an interview.

“Owning a stock exchange is the purest way to bet on a country,” he said, taking a minute to run the numbers: His $23 million investment is worth $230 million today. He said AI’s productivity-enhancing potential will overcome Israel’s economic weakness, its small population. “There will be a trillion-dollar company coming out of Israel, and that value will be shared among a tiny country.”

The war also gave TASE cover to move its Sunday-to-Thursday trading to Monday through Friday. It wasn’t an easy pitch in a country that takes Shabbat seriously, but a way “to signal the world that we are part of it” and gain entry into global indexes that have long snubbed it, Ben-Zeev said.

Anti-Israel sentiment and antisemitism are fueling campaigns at many US institutions to divest from Israel. Politicians will politick, he said, but “investors, at the end of the day, want to make a return.”

Q&A

Liz Hoffman: Israel has produced more tech unicorns per capita than any other country in the world, but they all want to go public in New York. How do you hold onto them?

Ittai Ben-Zeev: It used to be that a tech company with $100 million [in annual revenue] could IPO in New York. That’s no longer the case. The $100 million became $500 million. And because of the gigantic IPOs that are coming, for most Israeli tech companies, New York is no longer an option.

Six or seven years ago, if an Israeli company couldn’t do an IPO on Nasdaq or NYSE, they were looking at Singapore, Toronto, Australia. We managed to change the perception. And I believe that in 2027, maybe before the end of 2026, we’ll start seeing global investment banks leading global IPO offerings on TASE, and only for TASE.

I’m mindful, speaking to you the week of the anniversary of Oct. 7 — is patriotism part of the pitch?

No. Post-Oct. 7, I see a genuine change in the way that Jewish people in the diaspora, especially in the States, want to invest in Israel, not only to make a return but also to get a broader connection to Israel. But that’s not the case with the Israeli entrepreneurs. Israelis, I have to tell you, will be patriotic about certain issues, but that’s not the way they view the exchange.

Then what’s the pitch?

You are Israeli. You don’t understand the American mentality. The American market can be brutal. You miss your estimates by one cent, your share price goes down, and then what? Start in the Israeli market and, once you’re ready, you can always do a dual listing. Think about TASE as a stop on the way to New York.

You’ve also courted global companies to dual-list in Tel Aviv. Palo Alto Networks did that after buying [Israeli startup] CyberArk, but why would most companies bother?

We have data that shows you get more liquidity and more demand for your shares. You can argue that it’s not significant enough, but it’s a free option.

And not too many people are aware of it, but if you look at the amount of money Israelis have in cash deposits in Israeli banks and you compare it to GDP, we are No. 1 of any western society. That’s money that is just ready to be invested.

You’re in New York this week, selling the Israeli economy to investors. But the Middle East is a volatile place to invest right now, and there are big anti-Israel divestment campaigns at some US institutions.

In the old days, people would ask me: What will happen to Israel if something happens in Iran? I remember being in New York a couple of years ago, telling one of those American investors that if something happened in Iran, you should be more worried about your American portfolio than your Israeli portfolio. Israel is more well-positioned than it used to be, and I’m not sure that everybody fully understands it.

In terms of BDS [the push for boycotts, divestment, and economic sanctions against Israel], there are politicians all over the world. Investors, at the end of the day, want to make a return. And the Israeli market is a good marketplace to make a return. Also, I think Israel can do a better job of PR. This is part of what we tell companies: You need to know how to sell the pitch. It’s not only about facts; it’s also about storytelling. As a country, this is something we need to do better.

You shifted trading from Sunday to Thursday to Monday to Friday. Was that a hard sell?

We were in the middle of a war. Everybody understood that it’s important for us to signal the world that we are part of it. We needed to get aligned to global standards, and this is what we did this year.

What’s it like having Bill Ackman on your cap table?

For sure it has helped change the perception. Israeli tech guys, they look to New York. When they will read what you’re writing, they will give it much more credit than what the Israeli newspaper writes. So a very successful businessman like Bill talking about the Israeli economy, putting faith in the Tel Aviv Stock Exchange, helps my pitch.

The Scene

Riyadh Season — the Saudi capital’s biggest suite of events that had been key to its tourism push — opens next week with concerts, UFC, the Epcot-esque Boulevard World, and the world’s top ranked tennis players set to compete at the Six Kings Slam.

Since 2019, it has been the capital’s answer to anyone asking whether Riyadh is the place to be. After the Houthi strikes over the weekend, residents are asking themselves the same question.

Traffic on King Fahd Road is lighter and some companies — mostly those based in the King Abdullah Financial District — told staff to work from home on Sunday. Schools in the city have moved to remote learning for the week, with no clear date yet on when students will return to class.

When I ask Saudis — friends, relatives, and sources — how they are doing, most say: , thanks to God, the catchall for everything from the greatest blessings to the mantra mourners repeat when family members die. It’s the same expression they used in March when Iranian missiles first reached the capital, but the tone now is different after more than a dozen people were killed and hundreds wounded in attacks on King Khalid International Airport.

Fear is breaking through. Social media and WhatsApp group chats have been filled with eulogies for Captain Hamoud Alkalthami, the Saudia Airlines pilot killed on Thursday, and for Saturday’s dead — eight of them foreign residents from countries including Bangladesh, Egypt, and Sudan. People are posting about and queuing to donate to blood banks. The crown prince himself did so last week, part of an annual campaign, and that image was used to spur urgently needed donations. The captain’s death in particular has become a symbol for many Saudis: The war now has a martyr, with a name and face that looks like theirs.

Manal’s view

Saudis broadly trust their government. When they wrap themselves in the flag, or share statements of solidarity after attacks (at least for those who use their real names), it’s genuine and reflects how people speak in private.

But there has been a shift. Some are talking about leaving, which a few months ago would have been seen as a betrayal. Most are still confident and say the kingdom has come through worse. What’s pretty universal is the desire for the disruption to be over and to get back to living.

While the conflict with Iran was clear — we have been told to be wary of the Islamic Republic from the time we understood what an enemy was — the confrontation with the Houthis is more complex. Riyadh has tried a mix of strikes and diplomacy for more than a decade, and the UN-brokered truce in 2022 held long enough for people to stop thinking about the issue. It’s clear now that it’s a forever war, and few people I speak to can describe what winning would look like.

Without public polls, it’s impossible to gauge exactly what the Saudis think. Speaking to more than 25 people this weekend showed a split. One camp wants the Houthis finished for good, whatever that may meanOthers worry about the toll on Yemenis, our poorer neighbors, who make up the kingdom’s largest foreign community and share ties of kinship and history with Saudis.

Over the past six months, those who lived through the 1991 Gulf War used it to explain why they weren’t worried. Those six weeks of Iraqi strikes had one Saudi business leader “more frightened of the uncertainty of the Scud than anything else.” Uncertainty is again, 35 years later, the greatest fear.

Notable

• The strikes sharply raise the risk of Saudi Arabia being drawn into a wider war, after a decade in which Riyadh worked to contain the Yemen conflict rather than escalate it, Bloomberg reported.
• Eulogies for the 12 killed in Saturday’s strike filled Saudi social media, among them a Flynas flight attendant killed on duty and a university student in her final year, Arab News reported.

The News

OPay, the Lagos-based fintech firm backed by Softbank and Chinese billionaire Zhou Yahui, more than doubled its revenue in the first half of 2026 as lending overtook payments as its top source of income, according to a filing ahead of a planned New York listing likely set for next month. The company has applied to trade under the ticker OPAY, with a potential Nigerian secondary listing to follow.

The filing lays out a business growing rapidly after jumping 137% to $467 million in revenue in the first half of 2026 while net income rocketed by over 300% to $91 million.

OPay launched in Nigeria as a payments company in 2018 backed by Chinese investors and later funded by venture investors led by Softbank. OPay hadn’t disclosed an IPO price range or a listing date as Semafor was going to press but based on the normal sequence of filings and roadshows, investors will be expecting pricing to be revealed in mid-November. Previous reports have put the initial valuation estimates around $4 billion.

The fintech firm also outlined plans for a secondary listing on the Nigeria Stock Exchange after the NYSE debut to give local investors an opportunity to buy into a business that drives nearly nine-tenths of its revenue from Nigeria. But the F-1 filing warned investors that shares traded in Lagos may not be exchangeable for the New York-listed American depositary shares, potentially limiting liquidity and allowing prices to diverge.

Know More

A key part of the IPO is a broader strategic relationship with Standard Bank Group, Africa’s largest lender by assets. Its subsidiary, Stanbic Africa Holdings, has agreed to invest up to $200 million, subject to a formula that caps its stake at 4.99% of OPay after the offering. Standard Bank’s Africa head Lungisa Fuzile is expected to join OPay’s board following the IPO.

The two companies have also signed a non-binding memorandum of understanding to explore partnerships spanning payments, merchant acquisition, lending, remittances and the distribution of selected banking and financial products. OPay suggested in the filings that it will use Standard Bank’s infrastructure, regulatory expertise and presence to expand across Africa.

Step Back

OPay took off in 2019 in Nigeria with ambitions to be a super app that offered various features, including motorcycle taxi bookings, food deliveries, and quick loans. But it narrowed its focus to financial services in recent years and raised $570 million in venture funds between 2018 and 2021.

A handful of African tech companies have successfully listed in the US, notably e-commerce platform Jumia and telecom towers provider IHS but have had mixed performances. An OPay listing in the US would be the first by a fintech company with a mostly Nigerian customer base.

Borrowing costs are likely to remain elevated across the US and Europe for the foreseeable future, economists said. Experts surveyed by The Wall Street Journal projected that US 10-year Treasury yields would decline only slightly from current levels to end the year at 5.1%, and would dip to around 4.8% 12 months later: “It has been a sea change in the fundamentals underlying the fixed-income market and the economy,” one told the Journal. A key factor, as the economist David Skilling wrote in a recent note, has been that “state capitalism … is a much more capex-intensive regime” just as “the global economy is moving from a savings-abundant environment towards one in which available capital is becoming scarcer.”

Deadly weekend Houthi attacks on Riyadh’s airport underscored the risk of war enveloping still more of the Middle East. Several major energy CEOs cancelled travel to Saudi Arabia, which had been preparing several major conferences courting foreign investment. The missile strikes from Yemen have killed more than a dozen people; the kingdom has pledged an aggressive response, and has reportedly requested “urgent defense support” from the US.

The latest push by the Houthis, who are backed by Iran, “underscored the region’s volatility and the difficulty that [US President Donald Trump] faces keeping a lid on its conflicts at least until after midterm elections,” The Wall Street Journal said.

Economists and executives warned of thinning global oil buffers, with conflicts in the Middle East and Ukraine piling pressure on the energy supply chain. Goldman Sachs over the weekend raised its forecast for average year-end oil prices, warning of “downside risks to supply, low stocks, and the high sensitivity of interest rates to oil prices,” while the CEOs of major producer Saudi Aramco and trading giant Vitol respectively warned that stockpiles were “scarily thin” and that “there aren’t any more inventories to drain.”

Though efforts to adapt by building new pipelines and trade routes are underway, countries such as Iran are “not likely to stand by,” experts at the Washington-based Center for Strategic and International Studies warned.

Investments in AI infrastructure look set to maintain the pace of global economic growth despite pressure resulting from global conflicts, with the IMF saying Asia is likely to be a notable beneficiary. “AI, love it, hate it, it’s already here,” the Washington-based lender’s managing director said ahead of the fall meetings of the Fund and the World Bank.

Overall, she said the “investment shock” would help bolster growth in advanced Asian economies by as much as a full percentage point, and in emerging ones by almost as much. JP Morgan’s chief economist went further in a note to clients, saying Asia’s expansion was “broadening from an overwhelmingly tech-led export boom toward more balanced growth from tech, non-tech exports, and capex.”

Russia hit several Ukrainian power plants in the hours after US President Donald Trump declared an energy ceasefire, strikes that Kyiv’s supporters cited as further evidence of Moscow’s bad faith in peace negotiations. Faced with domestic cost-of-living concerns ahead of midterm elections, the US has agreed to import diesel from Russia — despite threatening sanctions on others that do so — and pressed for Moscow and Kyiv to reduce tensions.

But the Kremlin has shown little sign of easing its offensive: Along with the attacks on Ukraine’s power infrastructure, Russia has intensified strikes on Ukrainian civilians in recent weeks while stepping up what European leaders say is a hybrid warfare campaign: NATO should prepare for a potential deadly Russian attack, Poland warned.

The News

Tanzania is counting on increased investment to accelerate industrialization and create jobs for its young population, the prime minister said.

The government has targeted $15 billion in annual foreign direct investment, roughly triple last year’s figure, as part of its long-term economic plans.

Mwigulu Nchemba, speaking on the sidelines of an investment forum in London, said the government had put money into rail and port infrastructure, as well as expanding power generation to create an industrial base. This was on top of cutting the cost of doing business, and strengthening supply chains.

Nchemba said increased industrialization would boost local processing of natural resources leading to more employment opportunities. Tanzania, like many African countries, has a rapidly expanding population. The UN estimates 42% of people are aged 14 or under. The prime minister said the path to creating work for all the country’s school leavers rests on developing the private sector through investment.

“There is no way you can absorb all those graduates,” the prime minister told reporters. “The only way you can solve the issue of job creation is by empowering the private sector to create those vacancies for our youth.”

Know More

Tanzania has large offshore gas resources and deposits of minerals needed for the energy transition and digital infrastructure — such as copper, lithium, and cobalt — as well as precious metals and stones, including gold and diamonds.

In August, the country commissioned a 2,115 MW hydropower plant that more than doubled its electricity generation capacity and ​created a surplus that officials said could support power exports and industrial growth.

Tanzania, like governments across the continent, is looking for ways to add value locally instead of raw minerals exports.

In neighboring Kenya, President William Ruto has focused on job creation through industrialization as a key plank in his campaign to secure a second term in next year’s election.

Notable

• Liquefied natural gas development offers Tanzania its most obvious means of monetizing its giant gas reserves after the wars in Ukraine and Iran upended global energy markets, wrote Neil Ford in African Business.

The News

The $16 billion project to build Aliko Dangote’s refinery on the Kenyan coast is at the center of a high-stakes political battle ahead of elections in 10 months.

President William Ruto is hinging his second-term bid on a series of major infrastructure developments. He has argued that the refinery could raise Kenya’s annual gross domestic product by 12%. Additional expected benefits include 500MW added to the national grid and thousands of new jobs.

But mounting litigation, some initiated by his political rivals, is threatening to delay its construction, scheduled to be completed by 2030. Groups behind the legal action allege that the project is only the latest in a series of “secretive deals” signed by Ruto and his administration.

The government’s refusal to make public key agreements related to the refinery has been criticized by opposition leaders, including one of Ruto’s main challengers, Nairobi Senator Edwin Sifuna. He has launched a bid in parliament for the documents, including the refinery contract, to be released.

Unanswered questions remain over the impact on the environment, the community living near the refinery, and taxpayers.

The president and his allies have warned that legal hurdles and uncertainty affecting key projects could dampen investor confidence.

Ruto’s government is no stranger to court challenges to its financial deals. Its plan to privatize the country’s fuel pipeline company was eventually approved after various cases were dismissed. Last month, the $1.6 billion sale of a government stake in telecoms company Safaricom to UK’s Vodafone was declared illegal by the courts — the administration has launched an appeal.

Both deals are meant to fund Ruto’s infrastructure push, according to government documents.

Know More

Ekuru Aukot, leader of the opposition Thirdway Alliance,told Semafor he would “definitely file a suit” if the government failed to meet an Oct. 23 deadline in his access to information request seeking more details about the refinery including the names of those who stand to benefit.

“We are not opposed to investment. What we are saying is follow the law, follow the constitution,” he said.

“The era of secretive deals negotiated in the dark will end when we kick this current regime out and return our country back to the rule of law,” Sifuna said on social media, adding that Ruto was frustrating his parliamentary push for more details. He insisted that the disclosure was “a constitutional imperative.”

The threat of protracted litigation also looms over a suit launched by more than 100 Lamu residents arguing that the site of the refinery is part of their ancestral lands, with a court halting construction until the matter is heard.

In addition, campaign groups have raised the alarm over the government’s failure to publish the environmental impact report, with Greenpeace threatening legal action. Last year, its five-year effort to block the construction of a $2 billion coal plant in Lamu ended in success for the activists.

Despite the legal cases, Dangote and Ruto, who broke ground on the refinery project on Sept. 30, have expressed confidence that the project will overcome the legal hurdles.

Step Back

Seen as the candidate for the young and downtrodden in the last election, Ruto’s popularity has waned especially among the youth after the deadly 2024 Gen Z-led protests in which dozens of demonstrators were killed by police. Instead, Ruto is now leaning heavily on his infrastructure plans and the promised opportunities to shore up support for his re-election campaign.

He has promised to move Kenya “from third world to first world” within 10 years, and unveiled a $38 billion infrastructure fund meant to finance various projects.

The View From Nigeria

Dangote is taking the objections in his stride. Speaking to investors in Nairobi ahead of the groundbreaking ceremony, Dangote said legal challenges were “normal for us in Africa. In fact, this is small.”

He drew parallels with concerns over his cement plant in Senegal, which faced delays over land-related legal disputes. “They stopped our factory for one year. We went up to the Supreme Court to get a judgment,” he said.

Notable

• Kenya’s Capital Markets Authority approved the Dangote IPO, enabling local investors to participate on the Nairobi Securities Exchange.

Former President Barack Obama has cut an ad for Mississippi Senate candidate Scott Colom, the latest sign of Democrats putting real effort behind boosting their candidate in the deep red state as they eye a potential upset next month.

The Colom campaign will run the 30-second spot on digital and radio statewide in Mississippi as part of a seven-figure media buy in Mississippi, according to details shared first with Semafor. In the ad, Obama tells voters: “Mississippi, it’s time for a change.”

“You need to send Scott Colom to the US Senate,” Obama continues in the ad. “Scott made his community safer, prosecuting violent crimes as a district attorney and fighting corruption.”

Colom is running against Sen. Cindy Hyde-Smith, a conservative GOP senator who blocked Colom’s nomination to a federal judgeship under then-President Joe Biden. Colom currently serves as a district attorney in Mississippi.

The race to defeat Hyde-Smith is not a must-win for Democrats to retake the Senate and Colom remains an underdog in deep red Mississippi. But national Democrats have been eying the race for months due to the state’s large Black population, and Obama’s ad is a clear effort to juice turnout.

Sen. Raphael Warnock, D-Ga., will appear with Colom on Wednesday in Jackson and Democratic Sens. Cory Booker of New Jersey, Angela Alsobrooks of Maryland, and Lisa Blunt Rochester of Delaware have also previously campaigned with the Democratic candidate.Senate Minority Leader Chuck Schumer has also listed Mississippi as a target for Democrats.

Democrats tried to beat Hyde-Smith in the past and failed. She defeated former Democratic Rep. Mike Espy by 7 points in 2018 and a wider margin in a 2020 rematch. But most Senate Democrats think Colom, a young father, is a stronger candidate in a tough environment for Republicans.

The News

Despite increasingly critical media coverage of AI and the spread of data centers across the US, one news network has been painting a more positive picture.

More than half of the references to data centers on Fox News over the last two years would have left viewers with a favorable impression, compared to less than 10% on CNN and 5% on MS NOW, according to a new Semafor analysis of mentions of data centers on each network.

The mentions were pulled from closed captions preserved by the Internet Archive, which keeps a digital, searchable library of recorded TV news. A pair of AI models from Anthropic and OpenAI scored each reference on its content, with the network’s name removed.

Mentions of data centers have, predictably, shot up across all three networks in recent months as political backlash against AI swells and the data centers themselves have become a salient issue ahead of the midterms.

But Fox’s opinion and morning shows, including, , and leaned on the promise of AI, economic investment and the race with China, skewing Fox’s coverage more favorably, the analysis showed. The network’s news shows were more measured.

In an Aug. 23 monologue that at one point featured a chyron reading “The case for data centers,” Fox host Brian Kilmeade acknowledged “real concerns,” but argued that “saying no to data centers nationwide also means saying no to the tax dollars that can flow into a community. … If Americans don’t build the infrastructure to meet the demand, somebody else will.”

On CNN and MS NOW, the criticism focused as much on the facilities’ political toxicity as on harms like power bills or water use, casting them as unpopular with voters and a liability for politicians who back them heading into the midterms.

Data centers “are driving up energy costs, sucking up water supplies, wiping out rather than creating jobs,” MS NOW’s Katy Tur said in May. “Politicians beware.”

Polling shows that across demographic groups, Americans hold increasingly negative views of data centers: More than half of Americans say data centers are mostly bad for the environment, Pew Research Center found last month, compared with 39% in January.

Fox News did not comment for this story.

Max’s view

The pro-data center programming on Fox News comes as the right tries to define its positions in an AI-fueled, post-Donald Trump future.

Fox’s favorable data center coverage mirrors Trump’s position on their growth and the need for AI companies to help fuel the US economy.

“The only reason that communities throughout the U.S.A. should not want Data Centers is if they want to end up being backwards and poor,” Trump wrote on Truth Social in August. “If we kill the Golden Goose, you will only have yourselves to blame.”

But anger about data centers and the rapid advancement of AI represents a faultline within the MAGA coalition that swept Trump back into office. Florida Gov. Ron DeSantis and Sen. Josh Hawley, R-Mo., have questioned some data centers in their states, while Texas Gov. Greg Abbott seems to have flipped from supporting data centers to looking to slow their growth in his state amid a tougher-than-expected reelection campaign.

Some on the right I have talked to in the last several months worry that Fox News, which Trump watches religiously, and other pro-data center voices are encouraging the president to take positions that are broadly unpopular with his rural and suburban base.

“The Big Tech oligarchs, the guys driving AI, did a terrible job,” Steve Bannon, a staunchly anti-AI Trump ally, told the Daily Signal in September. “They came in to try to muscle local communities, and particularly since President Trump’s strongest base is in exurban and rural communities, that’s where they were really the ugliest, and they haven’t made their case, and they particularly haven’t made their case at the local level about the economics of this, and the energy of this, and the water of this, and the manifestation of what these things are going to be used for.”

Room for Disagreement

Not all of Fox’s data center coverage has been rosy; its tenor grew slightly less favorable in 2026 compared to last year.

“It’s taxing our system way too much on water, agriculture land, or electricity. We’re gonna implode,” the Texas agriculture commissioner said in an interview on a weekend Fox show in August. “We just can’t do it. There’s not enough.

The News

Hacked messages from an adviser to Israeli Prime Minister Benjamin Netanyahu are providing a glimpse of his aides’ close ties to the media.

The incumbent prime minister’s reelection campaign has been repeatedly rocked by hacked and leaked documents, part of broad attempts to destabilize a wildly divisive leader both inside and outside his country ahead of Oct. 27 elections.

The latest breach comes from the WhatsApp account of Netanyahu aide Jonatan Urich, who appears to have exposed sensitive information through a vibe-coded media-monitoring app. Haaretz reported Sunday that it had “verified” the leak.

The messages include conversations between Urich and Amit Segal, a central media figure who is chief political analyst for Channel 12 News, the country’s leading broadcaster, and host of the program , an analogue of the US show of that name.

In the exchanges, Segal offers advice about the campaign’s videos and its messaging: Netanyahu’s management of the aftermath of the October 7 attack is his core political advantage, he suggests. Segal mentions he offered the same advice to Netanyahu’s campaign spokeswoman. In another message, Urich shares a speech Netanyahu is planning to give.

Segal declined to discuss the messages on the record. Urich, who is also enmeshed in a scandal over payments from Qatar, didn’t respond to an inquiry, but in a lawyers’ statement posted to X confirmed that he had been hacked and threatened legal consequences against anyone who published the content of the leaks. Israel’s Privacy Protection Law prohibits republishing content obtained through illegal means.

Ben’s view

Hacks and leaks are challenging to cover. The most important story in most hacks — including this one — is the hack itself; this is part of the broad internationalization of the Israeli political campaign, in which actors across the region and in the US line up for and, mostly against, the leader who led his country’s response to the October 7 attacks.

But Israeli commentators also professed shock, if not surprise, Sunday at how closely aligned the journalist and spin doctor appeared to be. Segal is a center-right figure broadly aligned with Netanyahu — but he’s also a top journalist who appears on international platforms, like the American political figure Dan Senor’s widely-followed podcast, as an independent analyst.

One Israeli journalist compared Segal’s role in Israel to that of Fox News host Bret Baier, who maintains journalistic independence despite working for a right-wing platform. The messages put a dent in Segal’s version of that image, and offer a glimpse at parts of an Israeli media that has grown very close to its prime minister.

Room for Disagreement

Segal addressed the controversy on News 12, describing the messages as part of a “very delicate tango between the journalist and the subject of their coverage.” He added that “any people I’ve covered over the years gave me drafts of speeches, saying, ‘This will be our campaign, what are your thoughts?’”

Notable

• The region’s politics have been buffeted — and illuminated — repeatedly by aggressive cyber campaigns for years. Semafor reported in 2023 on extensive, leaked Iranian government communications that revealed Iranian attempts to influence US politics.

The News

When ABC News removed a story about Donald Trump’s sons from its website without explanation on Thursday, an unnamed company source told media reporters the article had been published “prematurely.” Nathan Lee, the investigative reporter who wrote the original piece, used the same language in emails to Powerus and Anduril, two of the companies at the center of the piece.

But emails between ABC News and its subjects, provided to Semafor, show the network seeking to downplay its errors by misrepresenting its own processes.

On Oct. 7, ABC News published an investigation into a new $6.6 billion deal between defense contractor Anduril and the US Navy to build a new high-tech submarine shipyard in Maryland. The piece largely focused on the financial ties between President Donald Trump’s son and defense companies, noting that Donald Trump Jr. is a partner at investment firm 1789 Capital, which “claimed a major stake in Anduril in June 2025 from a $2.5 billion investment into the company.”

After the piece was published, a spokesperson for Anduril reached out to Lee with several urgent requests for correction. The company — which had not responded to ABC News’ inquiries prior to its publication, according to an Anduril source — wanted the network to clarify connections between Anduril and 1789, noting that the firm had invested $50 million in Anduril’s latest round, a small percentage of the $2.5 billion total.

“Today, 1789 owns approximately 0.13% of Anduril and has no major investor rights. Any suggestion that 1789 financed the round or holds significant ownership, governance position or ‘major stake’ in Anduril is inaccurate,” Anduril’s spokesperson wrote to Lee, according to emails obtained by Semafor.

After the story was published on Wednesday, Lee told Anduril that the network was slightly tweaking the language in its piece, but it was otherwise standing by its story.

“I have spoken to my editors and we have updated the story for accuracy,” Lee said in a note. “We had pulled the ‘major stake’ language from previous reporting. 1789 Capital did claim a stake from the $2.5 billion investment your company received, so we are standing by our language to that extent.”

Anduril’s PR team was not satisfied, and continued to press the network to clarify its story, saying that the piece misstated 1789 Capital’s investment in Anduril’s fundraising round.

“It’s still not clear. I read your text and it reads as if they invested the full $2.5b. Would be much more accurate to list their actual investment of $50m and even more accurate to share that they own less than a percentage point in Anduril,” a spokesperson wrote.

In another email later Wednesday afternoon, Lee said ABC News’ editors had reviewed the language and were standing by the piece.

“Apologies, but my editors said we are standing by the language. I’ll make sure to reach out to both of you directly for any future stories,” Lee said.

But by Thursday, the network had changed its mind. The network removed the piece without explanation, and Peter Charalambous, an ABC News producer in New York, reached out to Anduril and Powerus, a drone contractor mentioned in the story, saying the story had been “published prematurely and removed from our website.”

On Friday evening, ABC News republished a new version of the story re-reported by Charalambous, now without a byline. An editor’s note did not include language that the initial piece was published early.

“Editor’s Note: CORRECTION: A version of this story published on Oct. 7 contained errors in the description of certain company investments, government contracts and event chronologies. After subsequent reporting, this version contains corrected information and additional context regarding some of those investments, contracts and events.”

A network source told Semafor: “We always review every situation in a thorough and thoughtful manner and will not be providing further comment at this time.” The source also noted that it was extremely rare for ABC News to remove a story.

Status reported Sunday that the article was mentioned during the network’s regular 9 am editorial call the day it was published, “suggesting at least some staffers were aware of its publication,” and it “circulated it through its usual email distribution without raising any immediate alarms.”

Max’s view

ABC News’ suggestion that its initial story was published prematurely is familiar spin to anyone who has dealt with crisis PR. It minimized the company’s mistakes and made the situation seem like an accident.

But at a time when distrust in the news media continues to rise, deflections like this can damage the credibility of mainstream, nonpartisan American journalism. Tellingly, the network seemed to know the difference in its official response, acknowledging that the original piece contained errors.

Brett Velicovich, co-founder of Powerus, another company mentioned in ABC News’ initial piece, complained that the network’s handling of the story reinforced his frustration with much of the media coverage of his company and the president’s administration.

“It’s destroying the integrity of what reporting is all about,” Velicovich said. “The damage is already done.”

The Trump family’s mix of business and governing, unprecedented in recent history, is an important reporting target, as journalists attempt to understand how companies and countries are attempting to influence policy by investing in Trump businesses or bringing the Trumps on as partners themselves. But ABC News’ decision to remove its story without explanation while misleadingly telegraphing that it was simply published on accident gave the president’s son and many on the right another opening to criticize mainstream news outlets.

If more and more people continue to believe that news organizations are willing to mislead or fail to take full accountability for mistakes, will they listen when outlets have legitimate stories?

Room for Disagreement

Remove the numbers, and the most basic version of the story — the Pentagon is paying very large sums to a defense contractor in which the president’s sons have invested, and whose co-founder, Palmer Luckey, is a high-dollar Trump donor — is correct. It also follows a pattern congressional Democrats have promised to investigate should they retake power after the midterms.

The EU and China reached a deal Friday to reduce China’s shipments of hybrid vehicles to Europe by half, forestalling a damaging trade war but doing little to address Brussels’ broader complaints.

The agreement slashes Chinese imports by millions of cars over four years, the EU’s trade commissioner said, calling it “only a first step.” The deal leaves untouched the vast majority of Brussels’ $1 billion-a-day trade deficit with Beijing.

Chinese brands accounted for one in four European hybrid sales in August, swamping Europe’s legacy automakers. Volkswagen recently announced 100,000 job cuts.

Beijing is playing for time, a Trivium China analyst suggested: “In exchange for reviews, dialogue, and ‘understandings,’ it has conceded little on the structural drivers of the EU’s massive trade deficit.”

European leaders rushed to back Ukrainian President Volodymyr Zelenskyy over the weekend amid a widening rift with the US, though the continent’s support for Kyiv may have an expiration date.

Berlin, Brussels, and London pledged further support to Kyiv, even as the push to rearm is imperiled by the rise of far-right European parties, which have tied cost-of-living issues to support for Ukraine: “Financially, we can’t do it anymore,” France’s Marine Le Pen said last month.

On Sunday, Andy Burnham became the first British prime minister to allege Russian interference in the 2016 Brexit vote — to “help voters in Germany and France understand that some of this politics is instigated via our enemies,” Burnham told podcast.

A Ukrainian drone attack knocked a Russian data center offline Sunday, as data centers emerge as increasingly attractive targets in war.

Russia and Ukraine have traded strikes on digital infrastructure in recent weeks, triggering major outages on both sides; Ukrainian strikes also prompted Russian bot traffic to plummet.

While such attacks are not unprecedented — Iranian strikes hit data centers in Bahrain and the UAE earlier this year — their fallout reaches far beyond the battlefield, disrupting the services civilians and businesses rely on.

“Modern warfare no longer discriminates between military targets and commercial infrastructure,” an analyst for The National Interest wrote, suggesting firms embrace “reasonable self-protection measures” in response.

The US threatened to halt arms sales to Europe for use in Ukraine unless Kyiv stopped striking Russian refineries, the Financial Times reported, accelerating a stunning deterioration in ties between the allies.

US President Donald Trump announced an “energy ceasefire” between Russia and Ukraine on Sunday, which Ukrainian President Volodymyr Zelenskyy — whom Trump called to be ousted — told Axios “was news for me.”

US threats over arms and intelligence had “ruin[ed] the trust completely,” a Ukrainian official said.

On Friday, Washington announced it would suspend sanctions on Russian diesel, though for Moscow, “the real benefit isn’t the billions of dollars in fresh revenue,” a CNN correspondent wrote. “It is the wedge this deal… drives right through the heart of the Western alliance.”

Indian authorities released the leaders of the Cockroach Janta Party on Sunday, after security forces detained thousands of protesters during massive anti-government demonstrations.

The satirical party — which in July forced the resignation of India’s education minister — is at the center of youth-led protests that roiled the Indian capital on Saturday, prompted by what the Cockroaches and others allege was a politically motivated purge of voter rolls designed to benefit Prime Minister Narendra Modi’s party.

One of the protesters’ chief demands is the resignation of Chief ​Election Commissioner Gyanesh Kumar, but “what started as an anti-Gyanesh movement has now become an anti-Modi movement,” a Delhi journalist argued, adding that the prime minister must now choose between “short-term shows of strength [and] long-term stability.”

The News

Several people were wounded in another likely Houthi attack on Riyadh’s King Khalid International Airport on Saturday, the third strike this week on the gateway to Saudi Arabia’s capital. Earlier attacks killed four people. Flights were canceled or diverted, and airport operations were suspended.

Hours of silence and speculation in the aftermath added to a sense of fear in Saudi Arabia and across the region. Rumors of injuries circulated in the afternoon, flights were canceled, Canada’s embassy warned citizens to avoid the airport at 5:34 p.m. The US followed at 8:03 p.m. Al Arabiya TV, which usually switches to breaking news if firecrackers are heard in other countries, was airing reruns. Saudi authorities finally acknowledged the incident at 8:34 p.m.

There are definitely security considerations to withhold information during an attack. But the insistence on projecting calm is starting to backfire. Firms in Riyadh were telling their employees to work from home tomorrow, and people have been spooked for weeks. Since the US-Iran war began on Feb 28, Gulf governments have restricted media coverage and criminalized social media posts, even as everyone living here could see and hear explosions themselves.

For months, Riyadh seemed relatively insulated from the war (sorry, “conflict,” as many officials in the region prefer to call it). Its airport remained open as travelers fled attacks elsewhere in the Gulf, and Saudis rallied around the flag, deeming any expressions of concern as unpatriotic. The messaging also seemed coordinated, with official statements followed by a flood of pledges of allegiance on social media.

Now this confidence appears to be fraying. And in a war that is as much about economics as explosives, this may be the vulnerability that the Houthis, and Iran, are banking on.

Saudi-backed Yemeni government forces had pushed back the Houthi advances around Bab el-Mandeb, the Red Sea shipping chokepoint this week. But in a similar move to the substantial losses that Iran had been dealt by the US and Israel earlier in the war, the Houthis chose asymmetric targets. The Iran-backed group has escalated attacks on Saudi oil facilities and civilian aviation, declaring Saudi airspace a military operations zone.

The timing matters. Riyadh hosts the World Petroleum Congress this week, with CEOs from ExxonMobil, Shell, TotalEnergies, and BP expected, followed later this month by the Future Investment Initiative and Wall Street’s billionaire financiers. Organizers insist both events will proceed, according to Reuters. But it’s certain that some of these executives — or their boards — will have second thoughts. Some US officials who were planning to attend the events in Riyadh this month are reconsidering.

At stake is not just some meetings, but a questioning of the kingdom’s pitch as a safe home for trillions in financial assets, data centers, and new industries.

The repeated airport attacks provide a sense that a major escalation is close. President Donald Trump said on Saturday that the US may join strikes on the Houthis and will decide quickly. If that happens, it’s likely the region will remain the punching bag for any Houthi or Iranian response.

Notable

• Ambulances and helicopters were sent to collect the wounded from Saturday’s attacks. The kingdom may be short on missile interceptors or are “struggling” to take out the Houthis’ rockets, The Wall Street Journal reported.

QatarEnergy won stakes in seven exploration blocks off Brazil’s northeastern coast, the latest in a series of Gulf investments in Latin America’s energy sector. The state-owned company will hold 30% of each block in the Ceará Basin, with operator Petrobras holding the rest.

Concession contracts, which let the companies keep what they find in exchange for royalties and taxes, are expected to be signed in the first half of 2027. Qatar has been building an international energy portfolio for more than a decade, and those assets are taking on more importance as the country’s exports have dwindled during the Iran war. This year, QatarEnergy entered Uruguay, agreed to take 30% of two blocks off Angola, and shared in a discovery off the Republic of Congo.

The war caught up with the Gulf’s construction sector last quarter. Project awards across the region fell 37.2% from a year earlier to $47.4 billion, according to Kuwaiti investment firm Kamco Invest. Every country was down by double digits; Oman all but stopped signing contracts, with awards falling 96.6%. Gas and chemicals were the only sectors to grow, as ADNOC and Aramco kept spending.

For the rest of the year, there are still some $2.05 trillion of planned projects in the pipeline, half of them in Saudi Arabia. Whether they get built is another matter: NEOM has halted work on The Line until after 2030 and faces a $16 billion bill to cancel contracts. This month, the kingdom shelved a stadium promised for the 2034 men’s soccer World Cup.

, by Anne Carson.

Through “47 compulsively readable long-lined poems of intense cinematic detail,” the Canadian writer — and winner of the 2026 Nobel Prize for Literature — retells the ancient Greek myth of Hercules and Geryon as a modern day queer love story, the British poet Ruth Padel wrote in a New York Times review of Carson’s 1998 novel. “Carson writes in language any poet would kill for: sensuous and funny, poignant, musical and tender, brilliantly lighted.” Buy Autobiography of Red from your local bookstore.

Yinka’s view

This month, Togo invited citizens to contribute texts, recordings, and translations to help AI models understand the West African country’s 50 local languages.

The absence of African languages from large language models has become a major concern for the continent’s policymakers and tech leaders. But initiatives like Togo’s suggest the future of AI in Africa may hinge less on who builds the biggest model than on who makes the technology useful to the most people.

Global AI investment is expected to hit $2 trillion this year, according to research firm Gartner, as tech giants race to build computing power and infrastructure. But few African companies are capturing the cloud computing spending, and even then the numbers are tiny: Africa has 18% of the world’s population, but only 0.6% of global data-center capacity, the World Bank says — and just 5% of that is equipped for advanced AI workloads.

For now, the continent’s main link to the boom is demand for minerals such as copper and cobalt. The bigger prize is productivity, from how farmers reach markets to how governments deliver services. The African Development Bank estimates inclusive AI adoption could add up to $1 trillion to Africa’s GDP by 2035. But without the infrastructure and energy to deploy it, AI is unlikely to add meaningfully to growth.

That’s why the World Bank argues in its biannual Economic Update, published this week, that most African economies should adopt and adapt AI rather than build frontier models from scratch — an expensive use of limited resources. Togo shows what adaptation looks like: A model that can’t understand citizens’ languages is of little use in delivering government services.

African countries don’t need to win the race to build the biggest model, but they do need to make AI productive across their economies. They also can’t afford to merely be suppliers to the AI revolution or just consumers of finished AI products; they need to become places where that revolution delivers its biggest gains.

Notable

• The World Bank highlighted several low-cost but impactful uses of AI in Africa: Tools that ​support student learning, help farmers detect and manage livestock diseases, and automate tasks such as accounting for small businesses.

Rwanda looks set to host the continent’s first F1 Grand Prix race in more than 30 years, beating rival South Africa to the honor, according to sources quoted by AFP.

President Paul Kagame launched a bid to host two years ago as part of efforts to raise Rwanda’s international status through sport, which has included welcoming the road cycling world championships and sponsoring high-profile European football teams. The government said the strategy has boosted inbound tourism.

Rights groups have, however, accused the country of sportswashing to cover up its reputation for silencing critics, including accusations of killings and disappearances, allegations the government denies. South Africa’s sports minister appeared to confirm reports that his country had lost out, saying on social media “we are happy for Rwanda” and suggesting the race would take place in 2030. He is, however, now lobbying for a second F1 race to go to Africa.

After nearly four decades at Honeywell, Vimal Kapur reached the top — and then took on the task of breaking the 140-year-old industrial conglomerate into three companies.

Kapur tells Penny Pritzker and Andrew Edgecliffe-Johnson how he managed that separation while simultaneously building Honeywell Technologies into a focused automation company, reshaping its portfolio and deciding where the new business should compete. The challenge, he says, is capturing the advantages of focus without giving up the benefits of scale.

A big part of that judgment comes from staying close to customers. Kapur explains why he tries to spend roughly a third of his time with them, how those conversations help test major strategic decisions, and why he believes “the CEO should have a founder’s mindset” when it comes to products, innovation and the future of the business.

Wall Street’s required reading this week runs 20 pages, carries an “Attorney Advertising” label, and tells financiers exactly how their favorite trade is going to blow up.

Law firm Quinn Emanuel’s March memo on data-center debt was making the rounds in recent days, laying out worst-case scenarios for the hundreds of billions of dollars being borrowed and spent to fund the AI buildout. It does the one thing professional-services memos never do: It names names.

A Google-backed project in upstate New York is full of holes, the law firm notes: Google’s backstop doesn’t start until construction is complete; deal documents contemplate a “disagreement” about whether it’s been triggered at all; and a six-month delay would let the tenant, AI company Fluidstack, walk away. Meta’s $28 billion Louisiana complex, CoreWeave’s GPU-backed loans, and Oracle’s off-balance sheet lease obligations get a similar legal dissection.

“Insolvency cascades” are set off by depreciating GPUs. Collateral food fights and margin calls ensue. Quinn Emanuel is a litigation boutique, so it’s talking its book. But business-development brochures were never such grim reading.

Nigeria introduced a new discount on fuel, reigniting fierce debate over the wisdom of terminating a long-running subsidy program three years ago. The move comes ahead of January’s presidential election, with high energy prices among the key campaign issues.

Finance Minister Taiwo Oyedele announced a 30-day discount on petrol sold at government-owned pump stations, insisting that it was not a subsidy. But that framing, which was widely rejected by analysts, has opened a window of criticism for President Bola Tinubu’s top challengers.

Tinubu ended the subsidy following years of recommendations by the IMF and other economists that the program, whose $10 billion cost in 2022 exceeded the combined budgets for health and education, was wasteful and corrupt. But its removal raised fuel prices sharply, pressure that was exacerbated by the Iran war curtailing energy supplies.

Ariel Investment’s John Rogers has been a longtime listener — he and the investment firm’s co-CEO Mellody Hobson have been consiglieri to everyone from Barack Obama to Howard Schultz. Indeed, Ariel’s entire brand has been about friendly advice to CEOs and boards across the world. That gives his decision to be a first-time caller — writing an activist-tinged letter to Mattel earlier this week, urging it to sell itself — particular weight.

It’s a frosty welcome for Roger Lynch, the Condé Nast CEO who is replacing Ynon Kreiz. With Ariel’s stakes added to that of another activist investor, owners of more than 9% of Mattel’s shares are pushing the company to find a buyer. Semafor can confirm that Authentic Brands, owner of Reebok and Nine West, has expressed interest, first reported by The Wall Street Journal.

The company declined to comment on Authentic’s interest and said it would consider Ariel’s views in the same way it considered the “views of Mattel’s other shareholders.” (Ariel didn’t respond to a request for comment.) But it may just be a matter of time before someone else — a real activist — decides to push on Mattel’s open door.

Faisal’s view

Two statements by US Senator Chris Murphy and Secretary of State Marco Rubio signal that Washington takes Gulf security seriously. They have come at a critical juncture for Saudi Arabia and the region.

Senator Murphy’s comments carry weight because he has long criticized Saudi policy. Yet he traveled to Riyadh, spent two hours discussing his concerns with the kingdom’s leadership, and publicly stated that Washington can’t achieve its goals alone. This has brought him closer to Riyadh’s view: If the US aims to enhance regional stability, contain Iranian influence, and advance a two-state solution for Israel and Palestine, it must work with its regional partners.

Secretary Rubio — who is also the US national security advisor — affirmed Saudi Arabia’s right to defend itself against Houthi aggression and Washington’s intention to honor its defense and security agreements with the kingdom.

Together, these statements matter at a time when some in Washington advocate a narrower role for the US. They show that American leaders recognize that threats against the Gulf have global consequences. While Saudi Arabia has considerable military capabilities, experience in Yemen, and powerful allies like Pakistan and Türkiye, active US backing remains crucial, both strategically and politically.

I write this as a Saudi citizen whose country supports Yemen’s legitimate government. The military operation there aims to restore sovereignty and confront the Houthi militia that’s attacking not just Saudi Arabia and Yemen, but the arteries of the global economy.

The Houthis are sometimes misrepresented as a Yemeni faction vying to share power with others in the state. But their slogan — “God is the greatest, Death to America, Death to Israel, A Curse Upon the Jews” — is clear about their objectives and ideology.

Allowing them to consolidate control risks turning Yemen into a permanent breeding ground for international extremism and handing another Arab state to Tehran. We need only look at the painful legacy of Iraq to understand the disastrous consequences of allowing Iranian influence to swallow state institutions unchecked.

Beyond security, the economic risks are acute. An Iran-backed force dictating traffic through the Bab el-Mandeb Strait threatens another chokepoint in the region, a scenario the global economy can’t absorb as it deals with disruption in the Strait of Hormuz. Keeping these waters open, which can only be achieved through Saudi-led deterrence, benefits the kingdom, but also serves US and global interests.

Some observers may question why Riyadh has turned up the heat now. The answer is simple: It was the Houthis who shattered years of goodwill and unilaterally escalated against the Yemeni government. Saudi Arabia was always clear that it wouldn’t tolerate attacks in the Red Sea or inside its territory.

To truly understand Saudi foreign policy — which, at its core, balances diplomacy with resolve — I recently spoke to HRH Prince Turki Al-Faisal, the kingdom’s former intelligence chief, on the debut episode of the Arab Views podcast.

Prince Turki traced Saudi Arabia’s engagement in Yemen through the eras of King Abdulaziz and his father, King Faisal, describing a policy shaped by strategic restraint within limits. With the kingdom now facing persistent provocations on multiple fronts from regional proxies, “that restraint is no longer operable,” he said.

The Houthis appear to have mistaken Saudi restraint for an inability to act. With the militia stretched thin, Riyadh sees an opportunity to defeat it or force it back to negotiations. Washington’s support isn’t a favor to the Gulf, but rather a clear-eyed assessment of its own strategic interests. By standing firmly with Saudi Arabia, the US is helping protect global trade, confront state-sponsored terror, and ensure that diplomacy in the Middle East is backed by unyielding strength.

There is a question of responsibility, too. Saudi Arabia and other Gulf countries have suffered severe damage from the US and Israeli war against Iran. Yemen gives Washington a chance to show that they won’t be left to manage the regional consequences alone.

Notable

• Saudi Arabia has been fighting the Houthis in Yemen for almost two decades. This Council on Foreign Relations backgrounder explains the history of the conflict and examines the latest escalation.

The News

Zambia signed a $1.5 billion health financing agreement with the US after separating it from a critical minerals deal that is still being negotiated. The health pact had been jeopardized by privacy concerns over sharing citizens’ data.

Zambia is among several African countries that have signed bilateral health deals under the Trump administration’s America First Global Health Strategy, but Africa’s second largest copper producer stands out for having publicly resisted key provisions and winning changes.

Foreign Minister Mulambo Haimbe said at the signing ceremony that the two memorandums of understanding “needed to be decoupled and this has been done.”

Washington said the deal was worth $2.49 billion, with Zambia committing $975 million in “new funding” and the US putting up $1.5 billion.

Global aid tumbled at its steepest rate on record last year as the US cut its budget by 57% when it dismantled the USAID model of unconditional funding, which researchers say has had an impact on health programs. A Lancet Global Health study published this week found that HIV testing dropped by more than 60% at four providers in Uganda and Zimbabwe, while treatment, which Washington had promised to protect, fell by about one third. “The safety net that was supposed to preserve life-saving treatment did not hold,” lead author Henry Cust said.

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President Hakainde Hichilema, who secured a second five-year term in August, held out for months against the US demands requiring it to hand over biological specimens and patient data in exchange for the funding.

The deal strips out the specimen clause and restricts data sharing to monitoring and evaluation of US-funded programmes. “The government will not be sharing any specimens with the United States,” Health Minister Roma Chilengi said.

Zambia joins 35 countries, including several in Africa, which have signed the Trump administration’s America First Global Health Strategy that replaces the old USAID and PEPFAR system. Kenya was among the first to agree, but its courts suspended the deal last December, first due to the data clauses and then because of privacy issues and a lack of parliamentary approval. Ghana and Namibia refused to sign up over concerns about data and specimens, while Zimbabwe lost all US health aid last month.

Notable

• Think Global Health, published by New York-based foreign policy think tank Council on Foreign Relations, found total health spending falls in most deals as the US steps back, by about 14% by 2030 in eight countries, including Mozambique, Lesotho, and Eswatini.

Russia ramped up its military outlays, putting it on track to spend a record $200 billion on defense in 2026 with little sign of the Ukraine war coming to an end.

The huge increase — roughly 40% higher than its original plan for the year, with a similar amount expected in 2027 — comes with the country’s budget and economy under growing pressure.

Russia can likely keep paying for the war by printing money, a leading analyst told Meduza, but ultimately, its people will pay the price: “The Kremlin will have to determine who exactly needs to pay, how much they need to pay, and how publicly this process will unfold,” a Carnegie scholar wrote. “All of this will have political consequences.”

Navi Pillay, a South African jurist who was the UN’s longest-serving human rights chief, was awarded the Nobel Peace Prize. Pillay was a pioneer long before taking on major international roles: She was the first non-white woman to serve as a judge in South Africa’s High Court. But it has been her time on the global stage — and her particular focus on genocide — that has won her most plaudits, beginning with the tribunal over ethnic cleansing in Rwanda.

The focus has made her a controversial figure, however, particularly in countries she argues have carried out genocide; she told The Guardian last year that she saw echoes of the Rwandan killings in Israel’s war in Gaza, which Israel angrily dismissed.

Germany, Europe’s biggest economy, raised its growth forecast, a rare bright spot as regional economic worries abound.

Berlin anticipates GDP will expand by 1.3% this year and a similar rate in 2027 — lackluster by global standards, but nonetheless significantly up from previous estimates, with the Iran war taking less of a toll than expected.

Elsewhere in the EU, the news was less upbeat: France’s 10-year bond yields climbed to highs not seen in decades, raising worries that Paris “may have crossed the line from too big to fail to too big to save,” the Nobel Prize-winning economist Paul Krugman wrote.

Political uncertainty pushed the euro toward its fifth weekly fall, capping a dismal run for European financial markets.

New Delhi rejected as “deeply offensive” Washington’s labelling of Indian workers in the US tech sector as “indentured servants,” as ties between the erstwhile partners frayed further. The two countries have been mired in deadlocked trade negotiations, have sparred over the US threatening sanctions over India’s purchase of oil from Russia, and are now at loggerheads over immigration.

The dispute is one of a number of risks to India’s IT sector, which contributes roughly 7% of the country’s GDP: “Western firms hired Indian workers because they provided lots of value for the cost,” an OpenAI staffer wrote in Asterisk magazine recently. “AI, it seems, could provide even more value, for even less cost.”

OpenAI reportedly assured investors it expects to reach a $70 billion annualized revenue target this year, an apparent attempt to assuage worries over it seeming to miss earlier projections, thereby casting doubt over the growth of the broader AI sector. The frontier lab’s figures are seen as key to understanding underlying demand for cutting-edge AI models, as well as justifying the huge global spending on tech infrastructure.

Some analysts noted, however, that the annualized revenue metric is itself flawed, while others pointed to indicators that the AI boom shows no signs of slowing: Samsung this week estimated its third-quarter profit grew nearly ninefold, while Goldman Sachs raised its forecast for economic growth in Taiwan, a key hub in global chipmaking.

Power-focused engineering firms are increasingly trying to cut down waste and optimize current systems as they position their commercial offerings for the huge demand growth of the coming decades.

ABB has in recent weeks rolled out a portfolio of products aimed at addressing the needs of AI data centers, while Schneider Electric acquired a US industrial software firm for $22.6 billion. Some of these solutions are not entirely new, but the energy demand surge from AI data centers, industrial electrification, and the need for more climate-resilient infrastructure is creating momentum to improve current systems.

“There is an opportunity to utilize existing assets more than we are today,” Schneider Electric’s CEO of digital grid Ruben Llanes told Semafor. ABB’s DC-powered data center solutions have been in development for over two decades, electrification president Giampiero Frisio said, but “the business and the market were not ready to do it” before.

Octopus Energy US is looking to acquire more software startups that can help utilities manage the influx of data center power demand, its CEO told Semafor. In March, the company bought the technology firm Uplight, which utilities can use to free up more power in the grid by subtly modulating their customers’ consumption. The company also recently rolled out a battery for homeowners in Texas that can release power to the grid at moments of high demand.

“We’re just beginning to scratch the surface of how consumer flexibility can help solve the problem of data centers,” which have an economic disincentive to curb their own power demand, Octopus US CEO Nick Chaset said. Startups like Uplight “are batting above their weight in terms of solving the problem, but that value is not yet reflected in the companies themselves,” he said. “So we’re very much looking for interesting opportunities in that space.”

Charter rates for oil tankers hit a fresh record, driving a larger wedge between the nominal price of crude futures and what it costs to actually receive barrels. Crude oil exiting the Strait of Hormuz averaged about 10 million barrels per day over the past week, despite a rising number of attacks on tankers. But the time required for the largest tankers to rest outside the strait waiting for crude deliveries from smaller vessels has effectively created a tanker shortage. It now costs up to $77 million to hire a large tanker to move crude from the US to Asia, up from less than $10 million last year.

Crude futures, meanwhile, fluctuated based more on traders’ perceptions of Trump administration statements than by the flow of physical barrels, which has made them “increasingly unreliable as a proxy for genuine supply,” analyst Amrita Sen wrote in the Financial Times; the gap between the “dated” and futures prices for Brent is now the highest since the war started. And because emergency crude stocks have already been drained, if Gulf exports fall again, “you do have that $200-a-barrel scenario,” the CEO of trading house Vitol warned.

Meanwhile, the International Energy Agency clarified that last week’s G7 commitment to release diesel from strategic supplies will be drawn from the volume originally authorized in March, and not represent any new barrels; European diesel prices jumped 8% on the news.

The News

Congressional Democrats aren’t eager to impeach Donald Trump. Pete Hegseth is a different story.

House Minority Leader Hakeem Jeffries and his leadership circle remain reluctant to lean too far into talking about impeaching the president if they regain power next month, a move that would revive the bruising battles of Trump’s first term. But as the Iran war squeezes Republicans ahead of the midterms, Democrats are aligning to call for the defense secretary’s ouster or resignation.

With impeachment still a dirty word among many House Democrats, targeting Cabinet secretaries could be a pressure release valve for lawmakers itching for action against the Trump administration.

“I 100% believe Pete Hegseth needs to be impeached and removed from office, because not only is he the worst secretary of defense in American history, he is a dangerous war criminal,” said Rep. Melanie Stansbury, D-N.M., who said it should be one of the caucus’ “top three priorities” next year.

Hegseth was reviled by the left even before the Iran war began, and since then he’s faced criticism from Republicans for his handling of the war. An impeachment vote could even be bipartisan: When the House returns after the midterms, it’ll be forced to take up a Hegseth ouster resolution filed by iconoclastic Rep. Thomas Massie, R-Ky.

Prioritizing Hegseth impeachment would solve a big problem for Democrats: If they win the House, their leaders will face intense pressure from the base to show a new level of fight against Trump. Yet they’re leery of the internal divisions or appearance of overreach that a third Trump impeachment might create, and still smarting from his return to office after two impeachment votes.

In public, top Democrats are accordingly circumspect on targeting Hegseth. Jeffries says Hegseth should be fired and that Democrats “haven’t ruled anything out” in their investigations. Democrats have filed impeachment articles against other Trump Cabinet officials, like Education Secretary Linda McMahon and Health and Human Services Secretary Robert F. Kennedy Jr. Rep. Yassamin Ansari, D-Ariz., has also filed impeachment articles against Hegseth.

Yet interviews with a half dozen Democrats pointed to Hegseth as the safest place to land. It’s not just safe-seat Democrats willing to take the plunge: Rep. Kristen McDonald Rivet, D-Mich., who represents a Trump-won district, said she was open to the possibility.

“If I were Pete Hegseth, I’d be worried. It’s certainly something that needs serious consideration, and I hear Democrats, yes, but I also hear some Republicans saying it as well. I think there’s a lot he needs to answer for,” she said.

Of course, it may not be even up to Democratic leaders in the end. Impeachment politics next year could be driven by an incoming crop of progressive lawmakers who could form a sizable bloc in the caucus. Any member can force a vote on an impeachment resolution, which outgoing Rep. Al Green, D-Texas, repeatedly triggered during Trump’s first term and his current one.

“Pete Hegseth should be impeached. Congress never voted for a war with Iran, and he’s been running one since February anyway. It’s cost innocent lives and more than $40 billion of our money,” said Melat Kiros, a Colorado progressive who is heavily favored to win election to the House in November.

Massie’s Hegseth resolution, among other allegations, lays out charges of violating Congress’ war powers and carrying out extrajudicial killings.

“They all should be impeached — President Trump and his cabinet that’s enabled him to do everything that he has right now,” said Adam Hamawy, a fellow Justice Democrats-aligned progressive from New Jersey. “Now, whether we’re going to be able to do that is another thing, but it’s not something that, you know, we should just ignore because it’s not possible.”

The Pentagon defended Hegseth’s record in a statement.

“Secretary Hegseth has slashed bureaucracy, unleashed innovation, and delivered for our warfighters every step of the way,” said Pentagon press secretary Kingsley Wilson, adding that the Pentagon “is better under President Trump and Secretary Hegseth’s leadership than before.”

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It’s unclear if Hegseth will leave the administration post-midterms. While Trump is known to be unpredictable, he likes Hegseth a lot, and those familiar with the situation are skeptical of any looming changes at the top of the department.

Still, other Democrats say they need to balance impeachment with acting on cost-of-living issues like healthcare that they believe will tip the midterms in their favor.

“There’s going to have to be a balance of addressing needs and meeting our constituents where they’re at, and also part of restoring the faith of the American people in our own government and restoring the integrity of our democratic institutions — it requires holding bad actors to justice,” said Rep. Analilia Mejia, D-N.J.

The Massie resolution will be a good test for Democratic support for going after Hegseth. Some Democrats are loath to support a measure drafted by a Republican and before any kind of investigative process has been completed.

But some leaders like Rep. Adam Smith, D-Wash., the top Armed Services Committee Democrat, have signaled they could back the Massie measure.

The House has only ever impeached two Cabinet secretaries, with the most recent being the GOP-led impeachment of Homeland Security Secretary Alejandro Mayorkas in 2024. The then-Democratic Senate voted to toss the articles of impeachment.

If Democrats take both the House and Senate next year, Hegseth could get a debilitating trial in the upper chamber.

Nicholas’s view

Taking on Hegseth is basically a free shot for Democrats. It allows them to demonstrate to the base that they could take action against the Trump administration without the risk of backlash that impeaching the president himself could bring.

But they’ll only be able to keep a lid on the prospect of impeaching Trump for so long. With many in the party pushing for investigations of potential malfeasance by the administration, party leaders will face tough choices about consequences if those probes do turn up wrongdoing.

And unlike 2018, when purple-district Democrats ran away from impeaching Trump, some are already embracing it. San Diego City Councilmember Marni von Wilpert, who’s running in a newly redrawn purple district, called recent comments by Trump about Iran’s ability to “take out” San Diego and Los Angeles an “impeachable offense.”

Notable

• Democrats on the House Armed Services Committee are weighing the creation of an oversight subpanel to probe Hegseth’s department, Politico reported.

The Signal Interview

“Everybody wrote this place off,” Shobi Khan says as he walks a visitor around Canary Wharf, the 130-acre estate he has overseen since 2019. After the UK’s banker-scaring vote to leave the European Union, and an office-emptying pandemic, the refrain he kept hearing was: “It’s over. Bad experiment. Why did we do that?”

Khan still remembers his fury when a rival London property developer wrote in 2024 that Canary Wharf needed “a drastic transformation” to survive, but those doubts were widely shared at the time. Just when the east London business district might have been celebrating a post-COVID rebound, it lost a series of prominent tenants, including HSBC, Moody’s, and Clifford Chance.

Fast forward to 2026, and Canary Wharf Group is reporting the highest rental rates in its history. Office occupancy now exceeds 92%, local retailers’ sales are 40% higher than they were in 2019, and visitor numbers, which fell from 54 million a year to just 20 million during the pandemic, are on track to exceed last year’s record of 76 million.

Khan can also boast a string of new commitments from high-profile global tenants. Visa recently leased 300,000 square feet of office space, Barclays just bought its headquarters for £750 million, and Citi is investing more than $1 billion in its European HQ. Capping them all is JPMorgan’s proposal to erect a £3 billion, 265-meter tower that will be London’s largest office building if its plans are approved. “What kind of vote of confidence is that?” Khan asks rhetorically.

What turned the tide, he says, was a multipart strategy to make Canary Wharf more competitive with the West End, the City of London, and Europe’s leading financial hubs. He now sees that approach as an intellectual property playbook that CWG could one day take to other markets.

“I’ve got people from China, from the Middle East, Australia, all coming here for tours,” he says, “and we get offers.”

A ‘green and blue’ diversification

Canary Wharf was a product of Margaret Thatcher’s government, the centerpiece of an ambitious redevelopment of London’s crumbling docklands. But from the opening of its first towers in 1991, it suffered from a reputation as a sterile, remote outpost that appealed to few employers other than those in need of large trading floors that old buildings in the City of London could not provide.

Khan joined CWG as CEO in 2019, having been chief operating officer of the US real estate investment trust General Growth Properties. Even before he moved, he recalls: “I’d keep talking to London business leaders, and they were like, ‘Oh, yeah, Canary, I remember it. So many bankers, nothing to do after five, and it’s really hard to get to.’ That was the perception for 30 years.”

He has been much helped by the opening of the Elizabeth line in 2022, which he calls “a game-changer” for improving access to the site. But Khan has also invested in bringing in a much broader array of companies and government agencies, so tenants from outside financial services now account for almost half of his office space.

He has simultaneously diversified a district that once had few apartments, shops, and dining options. About 3,500 residents now live in its apartment buildings — a figure he expects to double by next year. And Canary Wharf has more than doubled the number of retailers, restaurants, bars, and cafes since the pandemic. That has reduced the group’s historic dependence on the office market.

Lately, Khan has focused on creating more “green and blue” spaces like parks and riverside walkways, while “curating” activities and amenities designed to make Canary Wharf feel more like a vibrant community than an office park.

As he walks around the property, he points out outdoor event spaces, a padel center where the booked-up courts cost £80 to £100 an hour, and an Olympic-sized open-water pool that attracted 30,000 swimmers in the month after it opened this summer.

Such attractions may sound like sideshows, but they help bring Khan’s strategy to life. It takes time to change perceptions, he notes, and he needs such tangible symbols to convince potential tenants that Canary Wharf has truly changed.

“It’s like a house renovation. Some people can visualize it, but some people need to see the renovation,” he says.

A playbook that could travel

CWG, owned by Brookfield and the Qatar Investment Authority, is not wholly confined to its 130 acres. The group has developed projects elsewhere in London, including 20 Fenchurch Street, the curving City skyscraper nicknamed “the Walkie-Talkie.”

But Khan says CWG has developed “a lot of expertise” from honing its model, which it can deploy in other districts, cities, and countries.

It may do so over “the medium term,” rather than sooner, he adds, because it still has land to build another 5-7 million square feet, equivalent to seven to 10 new buildings.

For now, “we’ve got enough on our hands,” he says — even as he notes that Canary Wharf Group now prefers to be known by its initials, CWG, so that future partners won’t assume that its ambitions are limited to its current home.

Even as Khan worries about the impact of rising interest rates, he says the London market is “in an up cycle,” and predicts “great demand-supply fundamentals” for the coming years.

Appetite for top office space remains strong across the capital, while CWG’s latest earnings showed that availability in Central London fell 20% year on year as supply in Docklands stayed broadly steady. The shortage of supply elsewhere in London will get worse next year, Khan says, blaming it on UK regulations that have driven up construction costs, deterring new development.

A decade after the Brexit vote, “there’s been minimal flight” of bankers to European capitals, he notes. “But growth is less because of that. There have been jobs added in Amsterdam, Paris, and Frankfurt. But those jobs would have been here if it wasn’t for Brexit. And I think that additional regulation has put those jobs there.”

It is early in Andy Burnham’s tenure as prime minister and Khan is reserving judgment. “They’re very good at listening,” he says of the Labour government, but “we haven’t seen anything that’s been implemented that would be pro-growth.”

“London can still offer culture, creativity, an educated workforce, an attractive time zone, and the rule of law,” he notes. “That’s my point to the government: Just give businesses and individuals a little incentive to invest, and the city will grow.”

Why offices need ecosystems

Prime buildings in the City of London and the West End still charge a premium over Canary Wharf’s rents, and Khan’s business plan depends on narrowing that gap. But his task is not just to convince future tenants that his property is superior to rival offerings: Post-pandemic, he must still make the case for the office itself.

Staff are still pushing back against their employers’ efforts to get them back to their desks for three, four, or five days a week, and Canary Wharf’s tenants have differing policies on how often they expect people in their offices. But they increasingly share one view, Khan says: “You’ve got to have the best space to compete for that talent.”

Office workers no longer just want breakout rooms and good coffee; they expect access to nature and engaging activities. But even as office owners try to create “more of a hospitality vibe” in the buildings themselves, Khan says, what will differentiate business districts is the wider “ecosystem” they provide.

Will movie nights and electric go-kart tracks suffice to keep CWG’s buildings full if, as some predict, AI renders large numbers of office jobs redundant?

Khan, whose estate has not become an AI hub in the way that London’s King’s Cross district has, says there’s no sign yet that AI will empty Canary Wharf of its white-collar workers.

“Just look at our experience in the last 18 months,” he says. “Roughly 60% of the office occupiers are growing their footprint, 20% are roughly the same, and only 20% are shrinking their footprint.”

Notable

• The UK’s fraud office, apparently mindful of how remote Canary Wharf may feel to some workers, has offered to reimburse employees for the additional travel when its offices move there from their current Westminster location, Bloomberg writes.

Matthew’s view

Riyadh was once the Gulf’s escape route from the Iran war. No longer.

Several Western governments are advising against travel to Saudi Arabia. The US requires officials to obtain special approval to use the capital’s airport. I’m hearing of some executives leaving for Doha and the UAE.

Here in Riyadh, we now hear booms and see fires that have largely been absent since the Iran conflict began on Feb. 28. This is a jarring reversal: Saudi Arabia has suffered fewer attacks than its Gulf neighbours, its airspace has mostly stayed open, and the kingdom has projected a business-as-usual attitude.

That message is getting harder to sustain after Iran-backed Houthi fighters escalated attacks in response to the Saudi-led campaign against them in Yemen. One person was killed in a strike on Riyadh airport, a Saudia Airlines plane was reportedly left in flames, and hundreds of flights have been canceled.

Some offices, schools, and the Expo 2030 construction site near the airport were evacuated on Thursday. Foreign governments suggested their citizens remain vigilant, but what can individuals do when threats come suddenly from the sky?

Over the next few weeks, Saudi Arabia is hosting the World Petroleum Congress and the Future Investment Initiative, drawing CEOs from the world’s biggest energy and financial companies. While no postponements or cancellations have been announced, security teams are undoubtedly assessing what level of risk is tolerable for the titans of the global economy. Staying away could offend the kingdom, and firms that don’t stand with Saudi Arabia now risk missing out when the economy bounces back.

Older residents here repeat a mantra that the country has been through worse, notably when Iraq launched Scud missiles in 1991 during the first Gulf War. But most of those strikes were on military structures.

Riyadh was different then, too. It had no ambitions to be a hub for finance, trade, and tourism. Today, it needs stability. It’s harder to sell investors on its vision when the capital is under fire.

Notable

• Explosions “rattled” Riyadh on Thursday, with this week’s Houthi attacks being the deadliest since the war in Yemen was reignited last month, The New York Times reported.

Elon Musk blamed “certain oligarchs” for keeping Starlink out of India, comments New Delhi called “baseless,” escalating a yearslong feud over market access for the satellite operator.

Mukesh Ambani’s Jio — which recently announced plans for low-orbit satellite communications — and Sunil Mittal’s Airtel together control 80% of India’s telecom market: “Is Ambani the real boss of India?” Musk posted Thursday.

The tech billionaire has often litigated regulatory and business disputes online. Tesla has waged a social media campaign against EU regulators to win approval for the firm’s “Full Self-Driving” technology, Reuters reported, and Musk last week said the CEO of Delta — the only Big Four airline not to carry Starlink — “will lose his job” for contracting Amazon’s in-flight internet.

China pushed back against claims that it manipulates its currency to boost the country’s exports, as Beijing and Brussels spar in trade negotiations.

China’s central bank published a paper Thursday arguing that past experience did not suggest a stronger yuan hurt China’s trade expansion, or that a weaker yuan boosted exports, the South China Morning Post reported, in what one economist said offered “a direct response to accusations of renminbi undervaluation.”

Europe has long charged Beijing with deflating the yuan, by perhaps as much as 30%, and pursuing a policy of industrial overcapacity that harms European industries. China has vowed a “resolute response” if the EU takes collective action to restrict Chinese companies or products.

Top US and Russian officials have discussed selling part of the suspended Nord Stream pipeline to an American investor, Reuters reported, in talks spearheaded by White House envoy Jared Kushner.

Though the pipeline hasn’t transported gas to Germany since 2022, the country’s far-right AfD supports resuming flows, which could allow US investors to profit.

Kushner, who has previously characterized his business ties in regions of conflict as a way to promote diplomacy, is also marshaling a group of investors, including the US government, to acquire the assets of sanctioned Russian energy giant Lukoil.

Ukraine’s prime minister on Thursday criticized Washington’s attempts to “negotiate with the Russians about future economic projects” while also trying to broker a peace deal.

Global trade in goods is expected to grow by 3.9% this year, The World Trade Organization said Thursday, as conflict-fueled disruptions in the Middle East are more than offset by the booming AI trade.

AI-related goods and materials accounted for 47% of growth in the first half of 2026 while making up only 15% of trade, the WTO said, boosting cross-border commerce despite declines in shipments of oil, natural gas, and fertilizer.

Global trade has been “shaped by two opposing forces: a Middle East conflict affecting services as much as goods, and an exceptionally strong wave of investment in AI infrastructure,” the WTO’s chief economist said. “So far, the second force has outweighed the first.”

Oil markets largely shrugged off US President Donald Trump’s pledge on Thursday not to strike Iran before November’s midterm elections, amid intensifying attacks on ships in the Gulf and an escalating Saudi-Houthi conflict.

Trump said Washington and Tehran were having “productive” talks, as the president contends with voters who are increasingly unhappy with his handling of the eight-month war and the resulting record-high fuel prices. Trump’s comments appeared to be in response to reports that the White House was considering a plan to strike Iran before the midterms.

Even the plan’s advocates were doubtful a limited operation could lower gas prices, but would make Trump “look like he got a win,” a Republican told The Atlantic.

The Scoop

Continental, a Washington-based law and lobbying firm with close ties to President Donald Trump’s network, helped arrange a recent trip to Bosnia and Herzegovina by two Trump political advisers, three people familiar with the trip told Semafor.

Republika Srpska, whose Russia-friendly Serbian leaders have sought to align themselves with Trump, agreed earlier this year to pay $35,000 monthly to Continental, which would organize “meetings and discussions and establish relationships with key stakeholders in the executive and legislative branches,” according to a Justice Department filing.

Since then, former Trump campaign adviser Alex Garcia has helped arrange meetings with White House officials like Walker Barrett, Jarrod Agen and Richard Walters, according to another DOJ filing.

A White House official told Semafor that Garcia, who was in Republika Srpska around the same time as LaCivita and Blair, also set up a recent meeting between Trump chief of staff Susie Wiles and a Serbian official from the region.

The Balkan trip occurred after Garcia initially reached out to LaCivita, multiple people familiar with the situation said. LaCivita and Blair were there for 48 hours, one source said, to consult on voting equipment ahead of elections on Sunday.

Trump on Wednesday signaled his displeasure with LaCivita and Blair’s trip, which was first reported by The New York Times, amid some intraparty criticism that his advisers aren’t as focused as possible on the midterms. But Trump wasn’t particularly harsh about the trip in private, two people familiar with the situation said.

“If I’m the president … traveling the country every day and campaigning … I’m rightfully annoyed, right?” one of the people said. “With that being said, do I think James missed a second of work? No.”

Two sources said that Trump and Blair had a call following the news, with one calling it “a good conversation.” And while the duo has faced criticism from some corners of the Republican party, others close to Trump are openly defending them.

LaCivita and Blair’s trip focused on election integrity rather than political strategy, multiple people said; this year marked Republika Srpska’s first election using new ballots and Smartmatic voting equipment.

Asked for comment on whether Continental helped organize LaCivita and Blair’s trip, a spokesperson for the firm said only that Garcia was its only employee in Republika Srpska on Oct. 4 as well as its only employee to lobby the US government on its behalf.

The spokesperson added that Wiles’ daughter Katie, who also works at Continental, traveled to Republika Srpska in August for a separate reason: helping a US-based company complete “a feasibility study.”

After publication of this story, Melissa Stone, a spokesperson for the firm, sent the following statement: “It is wrong for Semafor to report Continental Strategy organized the Election Day trip.”

Know More

Republika Srpska voters on Sunday decided to keep former President Milorad Dodik’s nationalist party in power.

The US last year lifted sanctions on Dodik, who was banned from holding office after violating his country’s peace deal.

The Balkans isn’t the only place Continental is looking to cash in on the administration’s agenda abroad: The firm reportedly took on at least a dozen clients in Venezuela after the US captured its former leader earlier this year.

Republika Srpska, for its part, has signed lobbying contracts worth at least $9 million since Trump was inaugurated in an effort to curry favor with the administration (though it’s never signed one with Ballard Partners, Susie Wiles’ former firm).

So far, it seems to be working: Officials have yet to impose recently enacted sanctions on Serbian politicians despite Congress’ urging.

House Democrats already have a plan, reported first by Semafor, to oversee the administration’s Balkans policy if they win a majority next month.

Notable

• LaCivita has also advised another Continental client looking to ingratiate himself with Trump: Albania’s Sali Berisha.
• Trump this term has embraced a number of foreign governments who have moved to politically align themselves with the conservative or MAGA movement, as CBS and Reuters reported.

The Scoop

Coca-Cola is seeking to unwind its $5 billion acquisition of a British coffeehouse, months after a sales process faltered earlier this year.

The American beverage conglomerate is once again exploring a sale of Costa Coffee, according to people familiar with the matter. Coca-Cola acquired Costa for $5.1 billion in 2018, but has struggled to grow the business meaningfully. It explored selling Costa in late 2025, before calling off the sales process earlier this year after a tepid response from private-equity bidders, the Financial Times reported in January.

At least one strategic acquirer mulled what a deal for Costa would look like before passing due to valuation and strategic issues, one of the people said. It couldn’t be determined what price Coca-Cola might seek for the asset were it to market it more actively again. Coca-Cola’s on-again, off-again efforts to sell Costa mean it might again choose to wait.

Coca-Cola did not return a request for comment.

Know More

Costa Coffee has 2,700 outlets in the UK and Ireland and employs 20,000 people. The coffee chain is targeting younger consumers by adding more iced drinks and matcha to its menus.

Coca-Cola bought Costa from British hospitality company Whitbread. The business lost nearly £20 million in 2023 and 2024 combined.

Costa reopened a number of its revamped high street outlets in early 2026, around the same time as Coca-Cola reportedly abandoned its plans to sell the chain.

Costa’s chief executive Philippe Schillee told the Guardian that the company’s new Hertfordshire headquarters, which will open in January 2027 with capacity for 300 workers, “really signals our confidence in the business.”

The News

Three is a trend, and the leaks about Texas Senate nominee Ken Paxton’s campaign have more than hit that threshold.

On Thursday the Texas Tribune published audio of Paxton saying the US needs to “suck it up” and cut federal programs, more drips from the same fundraiser that elicited Paxton’s complaints about gas prices, lack of control over his own campaign, and the Republican midterm convention depressing his numbers.

“Paxton has always relied on his base and a strong statewide ticket to carry him across the finish line. He’s never played anywhere near this level and doesn’t understand the magnitude of effort being expended on his behalf to try to win this race,” Steven Law, former leader of the Senate Leadership Fund super PAC, told Semafor.

Sen. John Cornyn, R-Texas, said of Paxton: “Got to be more careful when you run with the big dogs.”

Republicans don’t see any of Paxton’s remarks as politically fatal to Paxton’s campaign, but the leaks are not helpful — they only contribute to perceptions of GOP disarray in a tight Senate race.

National Republican Senatorial Campaign spokesperson Joanna Rodriguez told Semafor that Republicans need to “put your jersey on and fight with us or go sit in the stands enjoying tofu with the Talafreakos.”

Know More

Polls this week have continued to show Democratic nominee James Talarico with a slight lead or tied with Paxton, a harrowing result for the GOP in the home state of the modern Republican Party. President Donald Trump rallied with Paxton on Wednesday night, then offered Paxton up for a debate with Talarico — prompting the Democrat to quickly agree and say: “I agree. Ball’s in your court, Ken.”

Republicans saw all this coming from a mile away, of course, spending huge sums to help Cornyn defeat Paxton in the primary, reasoning that the general election would be a relative layup for Cornyn. But that didn’t happen, Trump endorsed Paxton, and now Republicans say they need to act like the entire majority is on the line in Texas — because it very well might be.

“There are only two teams fighting for Texas’ future: the one with vegans and radicals who want to ban meat, reopen our borders, and transition your kids or the Republican team with a proven record fighting everything the other stands for,” Rodriguez said.

The News

The Federal Trade Commission is close to sending investigative demands to frontier AI companies, a senior agency official told Semafor — a sign that its AI probe is moving forward after its unusual disclosure to the public.

The FTC’s planned AI inquiry emerged in a New York Post story as the White House raced to project seriousness about the rise of tech that President Donald Trump has made clear he wants to treat with a light touch. Less than 24 hours before news of the FTC probe, the agency’s chair appeared alongside Trump and AI CEOs to announce a nonbinding accord that pledged industry self-regulation.

It’s rare for the FTC to reveal an investigation before it sends civil investigative demands, which have subpoena-like force. And it’s even less typical to do so well before any decision has been made about a potential lawsuit or settlement.

The leak of the AI probe raised the question of whether FTC Chair Andrew Ferguson — who was since appointed to Trump’s AI task force — plans an in-depth inquiry or a probe that’s more designed to convey the appearance of serious action ahead of the midterms.

Yet the senior FTC official reiterated to Semafor that it plans a significant probe, revealing it to the media due to public health and safety concerns about AI systems. The CIDs being sent to AI companies are dozens of questions long, according to the official, encompassing what the companies have said about the dangers of their products and other questions around consumer harm.

While two people with knowledge of the matter told Semafor that career FTC staff learned from the press — not agency leadership — about the AI investigation, the senior official disputed that. Career staff attorneys in the Bureau of Consumer Protection are drafting the CIDs, the senior FTC official said.

“Career staff who do not leak to the media are working hard every day on issues of importance to the American people, including” the AI inquiry, the official added.

Know More

One well-known exception to the FTC’s practice of not publicizing investigations was its revelation of an inquiry into Meta’s privacy practices after the 2018 Cambridge Analytica data release scandal, a move that responded to overwhelming public interest. A similar step occurred in 2017, when the agency confirmed it was investigating Equifax after a massive data breach.

One former FTC official told Semafor that the agency tries not to “publicize investigations in advance, because you don’t want people to prejudge the investigation. The simple fact that there is an existing investigation will impact a company’s stock price and operations.”

Yet William Kovacic, a former Republican FTC chair, said confirming an investigation in the press is “unusual,” but not without precedent and “not in any sense improper.”

“You don’t do this unless you want to make clear to the larger public that you’re looking at a particular issue,” he said.

The announcement, which may also target independent AI evaluator METR, aligned with Trump advisers’ approach to AI safety: Apply the laws on the books without adding new regulatory requirements. That differs wildly from what many bipartisan members of Congress, state regulators, the public and even AI companies have said they want: new rules and restrictions for AI as the technology reaches alarming capabilities.

Ferguson has said that he does not consider the agency to be an AI regulator. The Trump administration’s 2025 AI Action Plan called for a review of all FTC investigations commenced under former President Joe Biden to “ensure they do not advance theories of liability that unduly burden AI innovation” and even modify existing orders that may “unduly burden AI innovation.”

The AI industry appears unsure about where Ferguson is heading: “We’re trying to find out more about that,” OpenAI’s chief global affairs officer Chris Lehane said in an interview last week when asked about the investigation.

Anthropic, also named in the initial report, declined to comment. METR didn’t respond to a request for comment.

Room for Disagreement

Former FTC chair Lina Khan told ABC on Sunday that she doubts Ferguson is serious: “You have on the one hand, these CEOs of these AI companies wining and dining at the White House, the idea that the next morning they’re going to get some type of credible subpoena from the same administration I think just strains credulity.”

Asked about Khan’s remarks, Kovacic said: “When you’ve tied your destiny so close to the White House, you’re inevitably going to raise questions about the sincerity and the aggressiveness of the inquiry … The only way to dispel those concerns is to carry out a serious inquiry and explain what you’re doing along the way.”

Ashley’s view

Ferguson is wearing very different hats here, and we are seeing him embody the resulting tension in real time. As Trump embraces a hands-off approach to AI growth, he’s made clear by his task force participation that he aligns with the president.

But he’s also the country’s top consumer protection official, and he has shown he can go after tech when he wants to. On the antitrust side, he’s taken Meta to court and will face Amazon in court next year; he also previously asked AI companies about kids’ chatbot practices; it’s not clear what will come of that.

With AI safety is very much on the public’s mind ahead of Election Day, we might be seeing the Trump administration’s best recipe to assuage voters for the rest of the year: an investigation alongside a pledge for self-regulation.

That investigation, of course, may not result in much. These probes can take a long time, and AI companies are a long way from any finding of wrongdoing.

The News

The Trump administration on Thursday suspended more than a half-dozen tech companies, including Microsoft, from the program that allows permanent hiring of foreign workers — escalating its long-simmering clash with the tech industry over immigration.

“The H-1B visa program is meant to allow companies to bring in really the best of the best from outside the United States of America for positions that are completely impossible to fill with American workers,” Vice President JD Vance, who helms the administration’s fraud task force, told reporters. “Unfortunately, the program has become rife with fraud.”

The administration has tangled with tech companies since President Donald Trump returned to office over its interest in reining in H-1B visas for highly skilled workers.

That tension has resulted in a partial pullback of some attempted policy shifts, such as May’s clarification of an announcement that H-1B holders would have to start applying for permanent residency from outside the US.

The administration has also recently moved to charge more than $100,000 for a single H-1B visa.

Thursday’s announcement formally bans Microsoft, Adobe, Cognizant, Infosys, and four other companies from the permanent labor certification process. Representatives for Adobe, Cognizant, and Infosys did not immediately return requests for comment.

Microsoft said in statement that “we look forward to providing the Administration with additional information.” The company added that it “only files H-1B petitions for those who meet the rigorous standards of this visa category.

Notably, Trump plans to award a medal to the CEO of Microsoft later on Thursday.

In addition, the administration announced it had served subpoenas for a new investigation into multiple universities over their use of J-1 visas for exchange students. Among the educational institutions targeted by the probe are Pitt, Yale, Harvard, Stanford, Brown, UC Davis, Caltech, Arizona State, and MIT, officials said at a press conference.

“We will investigate whether foreign influence, improper financial relationships, or visa abuse are compromising federally funded research,” said the Labor Department’s inspector general, former Republican member of Congress Anthony D’Esposito.

Know More

Foreign workers made up almost a quarter of the US’ STEM workforce in 2023, according to the American Immigration Council. Businesses, which challenged the proposed H-1B fee in court, say they need visas to overcome worker shortages that stem in part from lagging workforce development.

Thursday’s announcement marks a continuation of Vance’s focus on fraud heading into the midterms and 2028. The vice president has portrayed the issue as bipartisan — though Trump, when he announced the task force earlier this year, suggested it would focus “primarily” in blue states.

Asked Thursday to explain his allegations of visa fraud, Vance pointed to “a couple of certifications” companies must make to receive the visas, including “that the person that you’re bringing in has a specialized, hyper-capable skill set.”

“That’s clearly not the case if you’re just replacing one American worker with a foreign indentured servant and undercutting their wages in the process,” Vance said. “So the fraud is that they’re making representations when applying for this program that are fundamentally illegitimate and therefore ultimately illegal.”

Notable

• Vance declined to directly address a Wall Street Journal report that US Ambassador to Greece Kimberly Guilfoyle requested a donor pay off debt in exchange for access to government officials, though he told reporters he doesn’t “love that.”

, directed by Shuichi Okita.

This comedy follows three strangers who share a name — and apparently little else — in a “wonderfully woven screenplay” that includes “numerous pleasures … from hearty belly-laughs to heartbreaking melodrama,” a Hong Kong-based film critic wrote for Variety.

The combination of tales results in a “surprising and inventive celebration of womanhood and the art of literary composition.” Watch the trailer for Satoko Always, which makes its international debut at the upcoming Busan film festival, on YouTube.

The News

The co-CEOs of Blue Owl say the stock market misunderstands them — but they aren’t leaving it. “We went public for a reason and that reason stands,” Marc Lipschultz said on the latest episode of Compound Interest, where he was a guest alongside Doug Ostrover in a rare joint appearance, their first since a wave of redemptions fed a market-wide backlash to private credit and sent Blue Owl’s shares down by 70%.

They dismissed the idea of a management buyout, the classic fix for a company heavily controlled by its founders and unloved by stockholders. “Public shareholders are going to benefit from the rise in this stock,” Lipschultz said, while Ostrover said the firm expected “fantastic results” over the next 18 months.

Liz has written a lot about the panic in private credit being overblown, but there are some real questions about the quality of its loans — from regulators, not just us in the press. Even so, lending is unlikely to be the engine that powered Blue Owl’s fast growth, which puts more pressure on the firm’s other businesses, particularly as a landlord to AI data centers. Lipschultz batted back concerns about an AI bubble: “All we really are determining is: are Microsoft and Amazon going to pay their bills?”

Transcript

Marc Lipschultz:
We don’t do a lot of this kind of event. We haven’t done one of these together in a very long time, Liz. We’re here to talk to you and Rohan because-

Liz Hoffman:
We have real key man risk on the pod right now.

Rohan Goswami:
Yeah, seriously.

Liz Hoffman:
Welcome back to another episode of Compound Interest from Semafor Business. I’m Liz Hoffman, Semafor’s business and finance editor. If you’ve been paying any attention at all to Wall Street over the past few years, you’ve heard of Blue Owl. They embodied the rise of private credit, the explosion of lending that’s moved outside of banks since the 2008 crisis. And for the past year, they’ve been the face of a big reality check for that industry. Investors got spooked. They’re demanding their money back from Blue Owl and peers like Blackstone, Apollo, and Aries. And because these things can’t be bought and sold quickly like a share of stock, the firms have had to limit those redemptions. So what we’ve got is a slow moving run on a very big bank. Well, you haven’t heard as much from Blue Owl themselves. They’ve kept a pretty low profile over the past few months.
And today we’re talking to the CEOs, Doug Ostrover and Marc Lipschultz. They are Wall Street veterans of KKR and Blackstone, and they did as much as anyone to invent this particular financial industry and have seen the weather change very quickly around them. I’ve written a lot that I think the panic in private credit is overblown, but there are real questions about how these loans will hold up, especially as interest rates stay high and borrowers get squeezed. But even if it’s fine, it’s unlikely to be the growth engine that made Blue Owl into what I have sometimes admiringly called a Wall Street super band that combines lending, real estate, sports, and increasingly big bets on AI data centers.
So where does Blue Owl go from here? What do Marc and Doug see in the AI build out that makes them nervous? And why not just take the company private? We’ll get into all of that with Doug and Marc in just a minute.
Doug and Marc, welcome to the show.

Marc Lipschultz:
Great to be here.

Doug Ostrover:
Yeah, excited.

Liz Hoffman:
So let’s start here. Blue Owl was the poster child, I think for private credit on the way up and has been fairly or not the face, I won’t call it the way down, but of the stress over the past year. Investors have soured on private credit in general and to some degree in some Blue Owl funds in particular. As you sit right here, Doug, we’ll start with you, what are you seeing?

Doug Ostrover:
Well, I think there’s a really big disconnect between what’s actually happening in private credit versus what the market thinks. So perception versus reality. And before we jumped on, Marc and I were talking about this because the asset class is doing really well. And by the way, we’re looking out the next 18 months and we think we’re going to put up fantastic results. So we kind of were asking ourselves, what did we miss? And we both decided like first brands. Here was this random auto parts company. I had never heard of it. They didn’t finance in the direct market. It went bankrupt. I believe there was fraud. We really don’t know much about it. And yet it became really important, like this watershed moment. And so as we look back on that, not just us, but I think our industry, we should have been more proactive about helping people understand this market.
We’re not doing anything new. I’ve been in the loan business for almost 40 years. It’s all I’ve ever done. What we’ve done is we’ve just taken what was a syndicated loan, made it a better product, made it safer, higher returns, but we probably could do a better job explaining that. And so we’re at this weird point right now where performance is good, yet in the market there’s this perception that things are really bad.

Marc Lipschultz:
I think also what Blue Owl really is sort of a misunderstood component of this. As you noted, this sort of almost interchangeability between direct lending and Blue Owl, and yet actually direct lending is about a third of our business. A very good part, by the way, to be clear, we love that part of our business, but our fastest growing business is our real assets business. Sitting here right now, this is exactly the environment where back to direct lending, where direct lending thrives, a rising rate environment, a strong economy, an uncertainty on the horizon. Institutions see that. Institutions are actually moving into the asset class, but with a little bit of the irony that today is exactly when direct lending thrives.

Liz Hoffman:
But one more here. I went back and looked at the investor presentations from your early days and it was a very growth-heavy message, which made sense. There’s a lot of money coming in, you were well positioned to get it. Is there anything you’d have done differently in how you marketed the fund, the kind of growth you were targeting, the message that you were selling to the public?

Doug Ostrover:
I don’t think so. When we started the business, we had this simple premise, let’s be one of the premier solutions provider to this private markets ecosystem. Let’s be narrowly focused. Let’s not have as many funds as our peers, but if we get in a business, let’s be a market leader. Let’s also make sure that we can generate high-current income in everything we do and protect the downside. So that was how we built the business. We started, if you remember, we had our credit business, which was big and we thought, oh, we can help PE firms finance all their companies.
But the one thing we, as a business, we’re really focused on is it’s a competitive market. We’re never going to become complacent. So how do we get better? So the first thing we did was we said, oh, let’s merge with the GP stakes business, the leading GP stakes business. Let’s make one firm and go to all these PE firms and now have the most unique offering. We can only-

Liz Hoffman:
This is the dial business that owns stakes in the general managers of the private equity funds themselves as an investor in the PE businesses. Yeah.

Doug Ostrover:
Exactly. So the idea was let’s merge these two because you were mentioning would we have done anything different? The answer is no, because we came to market with this very unique offering. To your point, we could up at the GP level through the old dial business now provide world-class solutions. Just so you know, that business, we’re probably bigger than our five biggest competitors combined. We were voted the number one PE firm globally this year. So it’s a business that works. It has very steady cash flows. The credit business has very steady cash flows. I’m sure you’re going to want to talk about data centers, the asset-based business.
What we’ve created for our investors, and I think it’s important because you talked about growth, what we’ve created for our investors, I believe, is a very steady stream of income. You can look at our funds. Our funds pay management fees for a very long period of time. We created a model that was different than everybody else. Basically just under 100%, let’s call it 98% of our revenue at Blue Owl comes from management fees. So as an investor, you’re not worried about, oh, are we monetizing assets, generating carry? What are our transaction fees? This is the most predictable, highly stable stream of income there is.
And so the key for us is what is our margin? And we’ve had very consistent growing margins, 58, 58.5%. And the question is growth. We had very high growth through until this year, and then a combination of credit and the media, it slowed our growth down. And I would tell you as a management team, as we look at the business, we like how we’re positioned, and if we can accelerate growth again with a high dividend, I think the stock has a lot of upside.

Rohan Goswami:
For our listeners, that growth was fueled in part by retail investors, non-institutional investors. And part of how you and your peer firms have pitched these products, these funds is as semi-liquid, and that’s a distinction that I think has confused, has stressed a lot of folks. Is it just that we need to come up with a new term for what we call liquidity here?

Doug Ostrover:
I don’t think so. Look, we are taking illiquid assets and creating a semi-liquid product around it. And here’s the bottom line, it’s working. Let’s just take credit. If you are invested in our credit product, our semi-liquid product, you’ve earned an excess of a 9%. Now, you could have gone and done a public high yield fund. You would’ve missed out on 600 basis points of incremental return. You could have gone to a loan fund and you would’ve missed out on 300 basis points of incremental return. You should know there will be periods where you can move in and out of these funds. There’ll be periods where redemptions are low, you can move in and out, but you should assume there will be periods where you have to wait to get your money. And here’s the bottom line, it’s working. Let’s just take credit. If you are invested in our credit product, our semi-liquid product, you’ve earned an excess of a 9%.
Now, you could have gone and done a public high-yield fund. You would’ve missed out on 600 basis points of incremental return. You could have gone to a loan fund and you would’ve missed out on 300 basis points of incremental return.
Remember, I’m talking about going from three to nine and change, six to nine and change. These are big differences when you’re talking about fixed income. So the product is delivering on what it said it would do. The other promise we made to investors is pretty simple. I think the key is what we’re focused on is making sure that what we bring to wealth are things that we would put our own money into that we think are appropriate for the wealth investor. Triple net lease, very safe. Credit, despite the narrative, we believe it’s very safe. And so these are things that we think are appropriate and we’re showing the market if you’re willing to give up a little liquidity, you can make a lot of incremental return. And so I think it makes sense.

Rohan Goswami:
They’re being sold these products though, generally through their financial advisors who are incented in different ways to sell different products. And I wonder if part of the issue is there an incentive to put your funds, these funds in portfolios that maybe just shouldn’t be exposed to them?

Marc Lipschultz:
I don’t think there is an incentive, at least the way we come to market. Look, we work with the best platforms and partners in the world. They’re incredible organizations, great financial advisors, and they succeed by delivering, exceeding or meeting people’s expectations. Remember, this is a really key point to keep in mind. The products, despite all the noise this year, the products are delivering. And as I just said, sitting here today, one would be very thankful to be in a floating rate product where in point of fact, loan losses have not, that is to say problematic loans, have not changed in any material fashion through the course of this year.
So I don’t want to speak for all FAs. I don’t want to speak for all products. I certainly think like any market that is changing and growing, it’s partly about manager selection and that could sound self-serving, but it is true. It matters. Are you equipped to meet that channel and to educate and deliver the right product and communicate and answer questions and deliver, of course, the promised results? There’s no magic in all this. You asked the question about these semi-liquid products. I think part of this whole evolution of alternatives of privates going into the wealth market is also about making sure we understand, you can’t take an illiquid asset and magically convert it to something liquid.
But what you can do is take a pool of assets with a lot of different investors and create exactly what it’s called a semi-liquid, a partial point of access. Doug quantified this and in particular product like direct lending, remember it has a natural liquidity to it. That is to say there’s hundreds of line items in that product that Doug referred to, that our large main product that has that entry and exit option.
It has hundreds of different loans, all of which have different maturities, all of which are paying interest, all of which are being refinanced or sold on different schedules. So when you think about this idea of 5%, it’s actually not a stressful undertaking. That’s not a stressful number because we have loans being repaid every quarter.

Liz Hoffman:
But to just put a fine point on it, there were points over the last year that depending on the fund, half of your investors asked for their money back. That doesn’t seem to me like a product that is working or that has found its market fit.

Marc Lipschultz:
I mean, it depends how you measure market fit. Again, I don’t think we’re suggesting this market by any measures.

Liz Hoffman:
I think if half of Nike’s customers said, “I’m returning these sneakers,” Nike would say, “There’s something wrong with the sneakers.”

Marc Lipschultz:
At the end of the day, and it is certainly true that this is an evolving and growing market, and I don’t want to suggest otherwise, and safe to say none of us want to have products where investors are saying, “Oh, I think I’ve read enough stories that I feel like I should ask for my capital back.” And so again, we need to do our best to both educate and provide information and answer questions and evolve products over time and markets.

Liz Hoffman:
I’d like to talk a little bit about one particular criticism that I think is often aired, which is that these things are marked at a hundred until they aren’t, and that you see the markdowns in private credit tend to, I think there’s some research on this, be seeper than the markdowns in the bank loan market. You had one recently, classic mid-market peak owned company make specialty paper. I think that loan went from 100 to 22 cents on the dollar in just a couple of weeks. And I think some people might look at that and say, “How honest was that 100 cents?” So can you talk a little bit about how you think about marks, how often you pressure test them, what your assumptions are going in?

Doug Ostrover:
Yeah. Again, this is another one, and I’m not being defensive at all, where the narrative is just completely unrelated to reality. And I’ve done this, I don’t want to say longer than anyone, but I’ve been doing direct lending since 2005. So I’ve seen all the models for pricing, so I just want to describe a couple. One is where firm prices the loans themselves. We don’t do that. There are some firms that price their own loans. There are others who use a pricing service and they get a range and they have to price within that range. There are others who use a pricing service and they’re allowed to override a certain percentage of those marks. We do something completely different. We outsource it 100%. We have a pricing service that comes in and every quarter analyzes the loans, we get huge reports, and they give us a mark and we accept it.
The price is decided by two things, and I think you’ll find this interesting. One, of course, is the underlying performance of that company, and they have access to everything we get. And so if it’s outperforming, maybe it gets marked up a little, underperforming, it should get marked down. The second thing they do is they look at comparables in the public markets, and if those spreads have widened out, then our spreads widen out. So I don’t want to say it’s perfect, but I think when you go and you focus on a single name, I think the market has a lack of understanding sometimes of how things trade. And I used to be a distressed trader in fixed income. You can have a security that maybe is going through a difficult time, but it’s going through a strategic transaction. If that deal happens, you get back par.
If it doesn’t happen, you could be severely impaired. The pricing service has to figure out how to mark that. Now, I’m not referring to your loan in particular, but there are these situations where you’re going to have volatility because the uncertainty of the company is just higher. And again, we have no say in how it’s marked, but I think it’s unfair to focus on just one or two names and you see it gets marked down that that’s a barometer for the broader market. So our loan losses over the last 10 years have been 12 basis points. Almost all those loans have been repaid, cycled through, but 12 basis points. It’s a fraction of the syndicated market. In fact, depending on the index, the syndicated market is 60 to 100 basis points. When we underwrite the loan, we get to spend weeks, if not months, working on it.
A syndicated loan, you get maybe three or four days to do your work. We can talk about why this is, but I bring this up because if you and I, if we had more time, I’m pretty certain I could convince you that a direct lending portfolio is actually safer than a syndicated loan portfolio.

Liz Hoffman:
By the way, I’m not sure I need convincing. I mean, my sense is this is a big credit market. We’re probably in a credit cycle and there’s probably going to be some blame to go around, but it’s not obvious to me that there’s going to be a particular corner of this market that will have been seen to be a particularly bad actor. But just that this-

Doug Ostrover:
Well, hey, can I just comment on, you made one point-

Liz Hoffman:
Yeah.

Doug Ostrover:
... about the market and the asset class has been around a long time. I have a quick question for you and Rohan.

Liz Hoffman:
Uh-oh.

Doug Ostrover:
1990 to 2026, syndicated loan market, which Marc and I are saying, let’s just say worst case is comparable to what we do, probably worse, but let’s just say it’s comparable. 1990 to 2026, how many negative years do you think there were in credit?

Rohan Goswami:
I’ll tell you this right now though, Doug, I wasn’t alive for 10 years ago, just so you know. Just so you know.

Doug Ostrover:
I want you to take a guess.

Liz Hoffman:
I would say three. I would say-

Rohan Goswami:
I was going to say five.

Liz Hoffman:
’94, ’08, and maybe 2020, though I don’t know where things netted out there.

Doug Ostrover:
Liz, you are 100% right. It was three years.

Marc Lipschultz:
[inaudible 00:20:37].

Liz Hoffman:
I was at least alive for most of those, if not sentient.

Doug Ostrover:
Here are the years you’ll be surprised. Obviously 2008, which we’ll come back to. 2015, the market was down four-tenths of 1%. 2022 with COVID, it was down 1%, like 1.1%. The reason I bring this up is unless we’ve gotten really dumb very quickly, history would tell you that this has been a very good place to be. Even 2008, which people point to, if you just stayed in the trade until June or September of 09, you were back in the money because it was just marked to market.

Liz Hoffman:
But the problem with 2008 wasn’t that investors in Lehman Brothers lost money, it was that it took down the entire global economy. Is there a chance that the private credit industry is plugged into the broader financial system in a way that we don’t totally appreciate, whether that’s leverage you guys are getting from the banks, whether it’s the panic and retail that makes them sell other stuff? Is this plugged into the broader system in a way that we haven’t seen that could unravel?

Marc Lipschultz:
You want to move risks into places where liabilities an assets are matched. And I’m not trying to be jargony about it, but if you take a look at the fundamental problem when you get to any crisis in the market, almost without exception, it has been an issue more of liquidity than anything else. It’s people have made commitments of capital that don’t match the duration of capital. And what private credit has actually solved when it’s done. Again, I’m not saying every manager every time, but what is solved as an asset class? Is that matching? Loans, multi-year loans belong in multi-year products. That’s why they go into funds. That’s why they go into, remember we talked before about those wealth vehicles and that feature, which some people have called the bug, the feature of the 5% tender, is to ensure you cannot have that mismatch problem. And even more to the point, the bulk of our capital, as we’ve talked about, sits in these vehicles like vehicles that are permanent, literally permanent.
And so there is no point in which that capital... So you have actually the inverse of the problem that has actually created those contagions and problems before, it’s the inverse. We actually have the capital tied up so that you have it matched. So now you’re just about performing. That goes back to Doug’s point. Actually, then these long arc questions are what match. As long as you can’t catalyze a problem based on misinformation or a panic of the moment or an unwind of the moment, actually you stabilize the system. And again, ample evidence. Look at what happened during COVID. Look at what happened when rates went from zero to four or five in SOFR. I mean, look at these moments, pretty follow the five years. Private credit has motored on. Private credit has delivered its results, continued to make loans, continued to get repayments, continued to return capital.

Rohan Goswami:
That feels like a good place for a pause. We’ll be back with more from Marc and Doug.
We are sort of headed for, it seems like, higher rates for at least a while. Most of your loans are floating, which is great for you guys a bit, but also requires that your borrowers are going to have to come up with more cash. Is this a double-edged sword for you guys? Does this hurt as much as it helps?

Doug Ostrover:
No. I mean, listen, if rates went to 15%, 12%, it could be a problem. But remember, Marc mentioned this from, I can’t remember the exact timeframe, but over a couple year period, SOFR went from basically zero to 5% and everybody-

Liz Hoffman:
This is the overnight funding rate that’s the baseline for your loans, you take a spread on top of that.

Doug Ostrover:
Exactly. So there was the expectation that we’d see a lot of defaults. And the truth is we didn’t know a 500 basis point move. We had to prepare for what could happen. We didn’t see an uptick. And listen, Marc and I, we’re not macroeconomists. We can’t give you a better view on interest rates than anybody else. We can give you a view on what’s happening in the economy because of all the companies we invest in. But my instinct is, and I don’t know when this crisis, this war will get resolved, at some point it will, and that will dampen inflation to a degree. But no, look, we’re set up that if rates did go a lot higher and we had problems, I mentioned this earlier, we come into these companies at very low low into values. And so the reason we’ve only had 12 basis points of loss per year for the last 10 years is because one, that low LTV, two great covenants, and three, we have a really strong workout department.
And so if a couple companies ran into trouble, it’s something we’re prepared for, we’re equipped for, and we’re there to try to maximize value.

Marc Lipschultz:
But Rohan, you’re touching a really interesting point about this. There’s a generation, but just a long period of time, it doesn’t even really matter because people’s memories can sometimes get a little fuzzy. The environment where we had zero rates, that’s the abnormal environment, not the environment where we have rates like we’re experiencing now. That’s actually the normal environment over the grand arc of time back to the bricks on which our foundation is built. It’s built out at times when rates absolutely looked like this. And so I think it raises actually really interesting questions about investment strategy because strategies that have been high performers, but kind of fundamentally predicated on really low rates, a little bit of the past as indicator of the future, I think everyone has to be a little bit careful and thoughtful about that. I actually was walking into a meeting, literally walking into a meeting the other day as the Chiron ran across and talked about how we’re now at a 19-year high on the 10-year rate.

Rohan Goswami:
You guys were happy about that.

Marc Lipschultz:
Right. I’m the only one that walked into the meeting and I said, “Hey, I just saw some good news.” Now, I say that half tongue in cheek, we all appreciate why very high-rate environments have implications for lots of assets, but actually very directly for direct lending is quite literally true. We don’t have a portfolio full of things that were bought predicated on some low interest rate environment, low interest rate financing. We’re creating assets today in digital infrastructure based on today’s rates, today’s higher cap rates, today’s capital structures. That’s a tremendously appealing opportunity set.

Liz Hoffman:
Just the amount of money that is coming into these data centers with hyperscalers as off-takers, these are really long-term projects. You’re making assumptions about what the world is going to look like a really long time from now. Are we all right to be a little nervous, setting aside whether the robots are going to kill us?

Rohan Goswami:
Yeah, let’s put that to the side for a moment.

Marc Lipschultz:
Not a first rodeo. This one’s magnitude that perhaps it is measurably a magnitude none of us have seen. Whenever this much capital moves this quickly and valuations move this abruptly, I think it’s awfully To conclude there’ll be some mistakes. That’s a truism. There’s never been an example, I don’t think, where that hasn’t ultimately proven true. So then it becomes like, well, what’s the mistake? Is the mistake the direction of travel or is the mistake the valuation? Who’s the winner and what’s it worth?
And I would say in this case, those two are very discernible. Overall, it’s safe to say you can agree the direction of travel. And I would suspect we all agree that AI is one of the most transformative, maybe it’s the single most transformative experience in the industrial world. We shall all see. But I think we can all agree it is extremely transformative, disruptive, impactful, and it will matter a lot to the economy now, five years from now, 10 years from now and beyond.
So we want to be a part of that. We want to invest behind that. In fact, if you don’t, you’re going to get rolled over by it. That’s very different from concluding that valuations are right. And I’m not trying to express, we purposely kept ourselves out of the business. We’re trying to judge, is this company worth a trillion dollars, a half a trillion, two trillion? You all know this, you talk to people in Silicon Valley. Venture capitalists will tell you, obviously an era where series A, first round are being done at billion dollar free money valuations in companies that have no revenue, may not even have defined a business model. We can all agree there’s going to be things that didn’t work there. So how do you participate? That to us is the key. We’re not trying to figure out, I mean, we care, we’re interested, we’re deeply curious people and we live in a society that’s impacted by all this.
But I mean, there’s two different questions. 10 years from now, what will be the interaction and role of AI and humanity? Monumentally important question. But just so you know, Blue Owl’s question is in 10 years will Microsoft pay the rent bill?

Rohan Goswami:
Isn’t that part of the problem here? And I appreciate that, Marc and Doug, you guys have both talked about how diversified your business is, but AI, it seems inevitably is. We are talking about one firm and that’s Nvidia that is underwriting almost everything. And yes, there’s a Microsoft and yes, there’s a Meta, but generally it all goes back to Jensen. How do you actually manage risk there? It doesn’t seem like you can.

Marc Lipschultz:
Our business isn’t hinged on the Nvidia question. That’s a wonderful company. So I don’t say that as if I would want to be tied into Nvidia. Actually, we do business with the five hyperscalers. We do business with all of them. And actually that wasn’t [inaudible 00:32:42].

Rohan Goswami:
But all of them rely on Nvidia to a degree.

Marc Lipschultz:
Well, that’s fine.

Rohan Goswami:
For financing or for the chips themselves, the genesis of it all of this entire play isn’t even the frontier labs. It is those tiny little chips, sometimes massive chips that Nvidia makes. And that’s sort of what I mean is everything is kind of correlated here. There are no uncorrelated players.

Marc Lipschultz:
Our business, we aren’t dependent on chip technology. Nvidia, we do something kind of simple and we’ve done it forever by the way. Our business in triple net lease, which to be clear is this idea of owning a piece of real estate, leasing it to a partner for 15 and 20 years at a time, and you just collect rent. They’re responsible for all the expenses, the operation. It’s the simplest way to participate and yet own a hard asset, a real asset, a building. And we do that under long-term, well-considered leases and have done that.

Doug Ostrover:
What we’re doing in triple net lease is, think about a triple B bank and they’re taking their real estate and they’re saying, “Blue Owl, we’re going to pay you 8% cap rate or a rate lease strain and we can make better use of that capital.” And so think of one of our divisions as critical retail. It could be a bunch of Walgreens stores. It could be things like Starbucks. It could be, I mentioned bank branches. That’s one piece.
Then the other piece is just large companies, could be their corporate headquarters, could be warehouse, could be distribution, could be cold storage. And that’s what we did in triple net lease. And we’ve generated an excess of 20% returns. Doesn’t have the same connectivity you’re referring to, but you’ll see why this is important. So we were in that business and all of a sudden we had the opportunity to go and instead of finance, do sale leaseback with triple B companies to go do it with on average AA companies and get higher returns.
And so we started doing that, but we were worried that-

Rohan Goswami:
And so our audience gets this, you’re talking about the shift. These double or AAA companies are the hyperscalers. The large-

Doug Ostrover:
The hyperscalers and they’re Meta, Microsoft.

Rohan Goswami:
Let’s take the Walgreens as an example here. People are critical retail, always going to need to buy whatever they’re buying from any of those spots. And if there isn’t, there’s likely going to be a tenant there. These are multipurpose to use the Walgreens as an example, things that sit on the corner of Main Street or sit on the corner of 51st and 2nd, they are places you can’t make more of them. But the data centers are built to purpose for one purpose only, that’s selling compute. And if there’s any slowdown in demand for compute or need for compute, that has second, third, and ultimately fourth order impacts on projects that haven’t even been built yet. I mean, we can talk about Project Jupiter in a second, but that I think is where people start to get a little worried is we’re spending all this money, we’re financing all of these build outs.
The ones that are underway are already fully utilized, but we don’t actually know what demand looks like or more pressingly, how we pay for these things because Meta is a great counterparty of course, but if they’re going to spend another $200 billion on CapEx with no return in sight, at some point something has to change. The first thing to go, I would imagine would be a lease for a building that hasn’t been built yet.

Doug Ostrover:
Let’s just take thousand acres, you choose where, thousands, where there’s been $10 billion of CapEx spend, state-of-the-art buildings, obviously cooling, separate power, everything state-of-the-art. And inside of those buildings, that $10 billion facility, there’ll be 30 to 40 billion of equipment. Now let’s fast-forward 20 years from now. What do you think the likelihood of all that infrastructure being worth zero?

Rohan Goswami:
The likelihood is, I think it’s nil. We’ve very clearly seen that these assets hold their value in enduring ways. I think Liz was telling me the other day about CoreWeave is able to lease out A100 chips at more than what they were able to four or five years ago.

Doug Ostrover:
We have a data center we own that was used by AOL before your time when you had You’ve Got Mail.

Rohan Goswami:
I remember AOL.

Doug Ostrover:
It’s 28 years old.

Marc Lipschultz:
Well, that’s in the movies you remember that. But can I pick up back, Rohan, to what you’re saying?

Rohan Goswami:
Sure.

Marc Lipschultz:
Because again, it’s a little bit of the two things can be true at once, but your predicate, your proposition that there are these interconnectivities in the system and there’s second and third and fourth-order effects is clearly correct. And sort of the and that means that when you want to invest behind this direction of travel, pick wisely. And this is where also things like when people say private credit itself, we talked about this, that’s a very wide asset class with lots of different implementations. Everyone gets on their call and talks about data centers. Boy, are there a lot of kind of data centers, right? There’s data centers that are leased to multiple tenants that are not investment grade. There’s short-term leases. There’s long-term leases. They’re very different.
And here’s the power, and I say this very clearly and directly in this case and happy to talk more broadly. We have picked a very particular lane. The lane we’ve picked is say we aren’t going to take on that kind of risk. Other people can, and there may be rewards for those risks. In some cases there will be rewards for those risks, but you’re going to have to confront all those uncertainties. For us, we’re making a very, very complicated to do, but simple to describe, which is let’s write the correct lease with the correct partner and all we really are determining is Microsoft, is Amazon, are they going to pay their bills? If so, this is a heck of a fine way to invest in the digital transformation.
I’m not trying to speak for all data centers or all forms of investment. Everything you said is true. There are going to be potholes at least in this landscape when you have so much capital moving around.

Liz Hoffman:
What’s the outlines of a deal in this space that you wouldn’t touch?

Doug Ostrover:
When we’re building it, the first thing we have to feel good about is if we’re worried, we’re not smart enough to know exactly what the residual value will be at the end of 20 years, but we’re pretty good at figuring out can somebody pay us for 20 years? So Liz, to answer your question, it’s got to be a credit worthy tenant. And that means we’re very fixated on the hyperscalers. Some of the emerging companies, you know all the large language models. It’s not that we wouldn’t finance an Anthropic or OpenAI or Grok, Llama, Gemini, but at the end of the day, we need somebody standing beside them guaranteeing that lease that we will get paid hell or high water over 20 years. And so that’s where we’re focused.

Liz Hoffman:
But again, that’s all concentrating the risk. We’ve seen a lot of these credit enhancement deals. You’ve got Google wrapping Anthropic debt. There’s all of these kind of duct tape being put around things that aren’t quite fit for purpose on the financing side, which just seems to me to funnel the risk up to, again, that handful of companies.

Doug Ostrover:
Listen, these are the biggest companies in the world. And you can go look in the derivative market and their risk of default has widened out. It’s gone from basically zero to anywhere from 1 to 3%.

Liz Hoffman:
It costs a little more to buy an insurance policy on one of the big tech companies defaulting on its debt than it used to.

Doug Ostrover:
That’s what I’m describing for listeners. There’s a derivative market. If you want to make a bet that Microsoft could default and not pay their lease, you can go in the derivative market and do that.

Liz Hoffman:
Do you buy that stuff as a hedge?

Doug Ostrover:
We don’t, but it’s available to us. We think it’s so unlikely, and the marketplace is saying that as well.

Marc Lipschultz:
So what we’re trying to stay away from, Liz, to your phrasing of the question, is essentially owning spec capacity, owning the idea of I have to take a view on which large language model wins. Boy, is that a complicated question? There’s ways to do it. There’s people that are trying to do it and there’s people are very competent at it, but someone’s going to be right, someone’s going to be wrong, and there’s going to be big swings one way or another. So I don’t want to take a view on which large language models could win. I don’t want to take a view on how much will someone pay for a megawatt of capacity three years from now.
Those are speculative propositions that, as you said, a lot of people are trying to wrap it because they’re trying to find ways to finance that risk. We’re saying for us, we don’t want to participate in that risk or it’s not the right way for us at Blue Owl, all about durability, predictability to participate in this evolution.
For us, it’s to say we’re going to let Microsoft judge that question. We’re going to let Amazon judge that question. And that has two benefits. One, if you had to take someone’s judgment on this question, I’m going to go ahead and proffer, strongly suggest you take the opinion of Sergey Brin and Marc Zuckerberg and Larry Ellison and Satya Nadella over mine and over Doug’s and over anyone you find on Wall Street.

Doug Ostrover:
Not over mine, Marc.

Marc Lipschultz:
Okay, fair enough. I put Doug in that category. So first of all, if you want to take a view, I’d probably take theirs over any of the Wall Street talking heads anyway. That said, what we want to say is we’re just going to let them take that view and own the upside and the downside of the view, which they can afford to do. We don’t want our investors in Blue Owl to own that risk. They can go own that risk somewhere else they want, go buy a share of stock, to your point, in Nvidia, if you want to own that risk.

Liz Hoffman:
I want to talk a little bit, go back to Blue Owl and what it is and where it’s going. So we’ve covered the loans are performing well, you’re saying the data centers, everyone’s freaking out about nothing, this is all fine, but the stock is at nine bucks. So why not take the company private? Do you think there’s more value in the company than you’re getting in the market?

Marc Lipschultz:
Well, let’s start with what you just said. I can explain it in a narrative arc, but I can tell you that the fundamentals of the business, and you saw it in our last quarter results, by the way, saw it in our last two quarters results. Again, I don’t want I’m so fond of irony today, but as you’ve seen, while growth has come down by virtue largely of what this sort of shift in sentiment, particularly by individual investors on one particular asset class, actually, if the depths of Hades are basically something like 10% growth, wow, a terrible model. And we see growth accelerating from here as we look into the future, and we continue to see strong results in our products. So I think that we need to do that, which is deliver and the market will re-rate now. So therefore, let’s start with the predicate.
I think there is a fundamental misunderstanding or misjudgment of value. By the way, it’s not we alone, as you know, the whole alt sector has gotten re-rated down very significantly, partly on, and we’re not going to make the same mistake. That’s why we’re lucky enough to be here with you. We don’t do a lot of this kind of event. We haven’t done one of these together in a very long time, Liz. We’re here to talk to you and Rohan.

Liz Hoffman:
We have real key man risk on the pod right now.

Rohan Goswami:
Yeah, seriously.

Marc Lipschultz:
Well, we don’t want to make the same mistake of not explaining because the reality is something is being lost in translation. I’m blaming anyone, blame ourselves. Let us do a better job of trying to explain. We have a wonderful durable, and in fact, the stress test, the pressure test, we just ran through it. And actually what’s happening is enormously durable result to Blue Owl and continued great interest in products, great results for products, and we think acceleration in the business. So sure, one could take it private, but we want public for a reason. And that reason stands. And listen, the public shareholders is going to benefit in the rise in this stock. We feel very confident the stock will indeed over time re-rate. I hope that time is shorter than longer, and we’re going to do our best to help that happen. But we could do it privately to our benefit alone, so to speak, or we can do it for everybody.
Being public has allowed us to have the capabilities, capacities we have to succeed in the future, do it in private form, but we’ll carry forward. We’re big shareholders and people that join us, we think they’re going to do very well as our partners.

Liz Hoffman:
And then just looking ahead, we’ve seen the alternative asset management industry really, I think, kind of barbell into these really large scale players, largely just asset gathering machines, and niche specialty players largely privately held. You are somewhere in the middle. You are $350 billion or so, about a third of the size of Blackstone, but are publicly traded in a way that some of the specialty PE shops are not. You said you went public, but you don’t have a giant balance sheet. We haven’t really gotten into it, but you have taken a very balance sheet light approach to the insurance business, which has been a huge growth engine for other people. It’s going to be a lot harder, as you said, to grow through acquisitions with the currency, with the stock price where it is today.
So putting all of that in the stew, what now? What is this firm going forward? What is the growth engine? How do you compete? Are there things you need to do differently?

Doug Ostrover:
Well, I think, look, as we look at the business today, we said this early on, we like how we’re positioned. From a competition standpoint, I can’t say we’re number one in everything we do, but we’re considered one of the best in basically all of our verticals. And by the way, that includes things like when we bought the triple net lease business, it was a relatively small business. We’ve taken that business and grown it from, I don’t know, 10, 12 billion to 50, 60 billion. And so I mentioned this earlier, let’s continue to lean in on what we do well. So our products, Marc said this, still producing really nice current income. I think we’re well positioned. The underlying products continue to perform. We have market leading positions. We’ve shifted our focus now to more organic growth. We just launched triple net lease in Europe. We exceeded expectations there.
We are making a big push in the asset-based lending business. We started something called strategic equity, which is a secondaries platform where we went out to raise approximately two billion. We raised three plus billion. So we’re planting those seeds for growth. And then by the way, if we find the right team and they’re willing to come in and make it accretive for the firm, we’ll take a look there as well. I think Marc mentioned this, the whole sector re-rated and then we re-rated within the sector. We have really good margins. This year our growth is a little bit light, but what we have that our peers don’t have is we have a very high-dividend rate. We’re paying out 92 cents. To your point, it’s a nine-plus percent dividend.

Liz Hoffman:
But it’s not quite a badge of honor. It’s a high-dividend yield because the stock price is very low. The stock price goes up, it starts to look less juicy.

Doug Ostrover:
Well, I think our point is over time, and hopefully in the not too distant future, the stock will re-rate and we’ll start to trade with a dividend in line with our peers.

Liz Hoffman:
We really appreciate the time. I think we got to wrap it up, but thank you for coming and walking the gauntlet. We appreciate you both joining us and yeah, we’ll have you back in a year and we’ll check in on all of this.

Doug Ostrover:
Great. Well, thanks for having us on. We enjoyed it.

Marc Lipschultz:
We really appreciate it. For us, it’s a privilege to have a chance to talk really with people that understand well what we do, but try to... Again, we take responsibility for wanting to do a better job of explaining the business. So this has been an incredible opportunity for us.

Liz Hoffman:
Appreciate it guys. Take care.

Rohan Goswami:
Liz, I think we’re both a bit skeptical of how the whole AI build out gets financed, but I don’t know. I felt actually quite compelled. What did he say? Betting that Microsoft’s going to pay his bills?

Liz Hoffman:
Yeah, I like that they clarified that, right? Because if we’re here in a couple years and this thing has gone at least short-term sideways, by the way, clearly long-term, I think this is a directional bet that is correct and is going to be a winner for the economy and for a lot of people in it, but a lot of people lost their shirts building the fiber boom and building the railroads, even those were also obviously directionally correct.
But when you look back on any kind of crash, there’s always some thesis in it, some assumption, some conventional wisdom. There was just wrong. And in 2008, it was no one’s going to stop paying their mortgage and mass. That’s not going to happen everywhere all at the same time. Obviously it did. Their thesis is clearly Microsoft and to some degree Meta and Google and they’re picking their spots, but these big guys are going to be good for it. And if that turns out to be wrong, they’re going to lose a lot of money and so is everybody else, but at least it clarified what the animating idea here is from an investability and bankability standpoint.

Rohan Goswami:
What did you make of both of them sort of pushing back on the idea that they’d want to go private?

Liz Hoffman:
Well, I think there’s something, perhaps not on all days, but there’s something enjoyable and admirable about running a public company. So most CEOs like to run public companies. He said there’s a reason we went public. Actually wish we had pressed him on it because it’s not totally obvious to me what that was. Most people go public because they need a balance sheet. They don’t really have one.

Rohan Goswami:
He was implying that M&A little bit.

Liz Hoffman:
They did it so they could combine a lot of these businesses together and sort of come out with a big story, and they did it because the market was super open at the time and going public is a way to get really, really, really rich. I would be shocked if it hadn’t seriously crossed their mind in the last year. They also, we didn’t really get into it, but they stopped buying back stock essentially too. So that’s the other way you can say, “If the market’s not valuing my company, I can either buy it myself or I can use the company cash to buy back stock at a discount.” They’re not doing that either, and so I suspect it’s a little kind of waiting for the ground underneath them to solidify a bit.
That said, they’re also a public company. They are for sale every day, so we’ll see if someone loves anything and over the transom. Put your M&A ear to the ground.

Rohan Goswami:
And you made a reference to this, which I, for better or worse, do understand, but maybe for our audience, what did you mean when you said that they kind of avoided the insurance plays that Apollo or some of the other big players have done? And more than that, do you think that’s a good idea for them?

Liz Hoffman:
Insurance has been such a siren song for alternative asset managers. Put very simply, you pay your life insurance policy today and they have to give it back to you in 30, 40, 50 years, and so they get to have a lot of fun with it in the meantime. And there’ve been two approaches. One is the Apollo KKR approach where they say, “We are going to be an insurance company. We’re going to buy an insurance balance sheet. We’re going to be writing these policies. We are going to be on the hook for that policy.” The other is to manage insurance money, which is what Blue Owl has done. But I would say they’re like a foot in, half a foot in, a couple of toes in and-

Rohan Goswami:
Dipping their toes in the water, so to speak?

Liz Hoffman:
Yeah. And it’s hard to control your destiny if you’re not doing that. I don’t know exactly. They’re going to have a hard time buying something, which is kind of the only way in. They have some asset management arrangements where they take a bunch of insurance money and manage it and their funds and some other funds, but that’s not the flywheel that has made Apollo, for example, so successful in this space. So they’ll have to make a strategic decision, but right now they don’t really have the currency or the leash from their investors, my guess, is to go make a big bet. Though Doug did say something, said, “If we found the right team,” it wasn’t clear exactly what he was talking about, “If we found the right team, we found that we could make it a creative and we could convince them that the $9 a share of stock we’re going to give them today is going to be worth a lot more.” Maybe they’re on offense. I don’t know.

Rohan Goswami:
Well, maybe. But certainly a confluence of some of your favorite things on the planet, as these episodes tend to be from time to time.

Liz Hoffman:
Yeah, and I’m glad they came on. Look, these guys have been in the eye of the storm for a year and it’s always good to just point a mic at the people in the news and ask them, “Why are you in the news and what are you doing about it?” So I thought it was a great conversation.

Rohan Goswami:
Well, that feels like a great place to leave it. Well, that’s it for us this week. Thanks for listening to Compound Interest from Semafor Business. Our show is produced by Josh Billinson with special thanks to Anna Pizzino, Adam Banicki, Ben Smith, Katherine Bilgore, Claire Einstein, Rachel Oppenheim, Tory Core, Vilanna Wang, Garrett Wiley, Amber Ali, Stephanie Chang, and Daniel Hoeft. Our engineer is Bob Mallory. Our theme music is by Steve Bowen.
If you like Compound Interest, please follow us wherever you get your podcasts and feel free to leave us a review. And if you want more, you can always sign up to get Semafor Business five days a week in your inbox at semafor.com.

There’s a mini-scandal brewing in Dubai’s elite food scene. The latest Michelin Guide awarded stars or distinctions to 11 restaurants that have temporarily or permanently closed because of the war. Food writer Samantha Wood questioned why shuttered restaurants made the cut. Michelin told her it was “fully aware that due to the current circumstances” some restaurants were closed, and said it would reassess when (if?) they reopen. One critic quipped that a new Michelin category is warranted: “Bib Fermé.”

Controversy aside, there are still great meals to be had. Orfali Bros Bistro — run by Aleppo-born Mohammad Orfali and his siblings Wassim and Omar — now has two stars, adding to the accolades for the region’s most celebrated chef. They recently revamped the menu with creations like crème caramel caviar and a cold strawberry, tomato, and kohlrabi dish, while perfecting favorites like the corn bomb and spicy burghul salad wrapped in a shiso leaf.

Abu Dhabi’s Technology Innovation Institute, a state-run research body, released AI models trained on the Emirati Arabic dialect, improving translation, transcription, and voice-enabled services. The Falcon-Emirati model and related tools for speech recognition and extracting Arabic text from images and documents are relatively compact. The speech recognition model has 1.6 billion parameters, but is more accurate than a 30-billion-parameter model, according to TII.

AI training in Arabic has lagged behind other languages, partly because dialects vary widely and can be incomprehensible to people who know only the formal Arabic used in news reports and textbooks. This has made some machine translations comically inaccurate, sometimes turning innocuous words into vulgar references in English. TII aims to eliminate those errors by training models on local dialects, idioms, and cultural references, ultimately making AI more useful in the region.

DP World will invest $90 million over two years to expand its terminal at Angola’s Port of Luanda, more than doubling capacity as the Dubai-based firm deepens its bet on African trade. The expansion will lengthen the quay and add 15 cranes, allowing the terminal to handle two large container ships at once and cutting turnaround times by up to half, the company said.

Angola also extended DP World’s concession by 10 years, to 2051. The company has spent more than $260 million on the terminal since it began operating there in 2021, and volumes have nearly doubled to more than 350,000 containers. The investment extends a two-decade buildout across at least nine African territories that has kept DP World profitable through the Iran war. The company plans to commit another $4 billion to the continent, its Africa chief told Bloomberg.

The Scene

As Western governments slash foreign aid, many organizations are seeking Gulf philanthropy to fill the gaps. While wealthy individuals and governments in the region are ready to take on a larger role, a younger generation of donors isn’t content with plowing money into existing programs, and is instead seeking new approaches with more effective and measurable outcomes.

Sonia Ben Jaafar, CEO of the Abdulla Al Ghurair Foundation, told Semafor that private donors from the Gulf want to be more involved in designing development programs rather than simply financing them. She said the region’s charities have developed their own expertise that can help inform changes to improve existing charitable programs. The foundation she runs — established in 2015 by Emirati billionaire Abdulla Al Ghurair and chaired by his son Abdul Aziz — has become one of the Arab world’s largest privately funded education initiatives, reaching about 500,000 young people over the past decade.

The foundation runs like a business, using performance metrics to evaluate its grants and tying funding decisions to outcomes such as job placement rates, Ben Jaafar said. The approach fits within a broader push by Badr Jafar, the UAE’s special envoy for business and philanthropy, to bring private donors, businesses, and governments together to address humanitarian needs.

In an interview in New York during the UN General Assembly, Ben Jaafar discussed the changing role of private wealth in the region, and why her foundation is quick to drop programs that don’t deliver results.

Why is private philanthropy hesitant to step in to cover underfunded programs that have been abandoned by many governments?

The narrative that philanthropic capital will just fill that up is not going to happen. What we’re hearing in the discussions, at least that I’m in, in the closed rooms, is: What does the new framework look like? Because it cannot be more of the same, and philanthropic capital shouldn’t be coming in as a gap filler.

We need a new model of how public, private, and philanthropy — this is the new three Ps — are going to partner together.

How does the Abdulla Al Ghurair Foundation measure the success of its programs?

We have a strategy that would look like any business, except instead of generating revenue, we need to generate impact for the communities we serve.

We have, on average, a [jobs] placement rate of 78%, which is a very high placement rate in my field. We don’t count just who we train. We want to know that that training landed them into a revenue-generating life.

You were early to get into Syria after the war ended. What are you focusing on there?

We’re training young Syrians to learn construction skills, and paying them to attend an apprenticeship program. Those graduates will then work on the schools we started to refurbish there.

During the war, we started a fund in 2018 that was focused on educating refugees in Lebanon and Jordan. Some of those Syrians are now returnees and are being picked up by government administration and companies to support the reconstruction.

Have you funded programs that didn’t work?

We have funded programs that we were sure would work, and we were sure we had the right partner to implement it.

Because it’s outcomes-based funding, if you cannot meet the milestone and you don’t have a good reason, or we can’t find a solution with you, then we will defund that. We’ll stop. We’ll sunset that, and we’ll find a new way of doing it.

Notable

• Abdul Aziz Al Ghurair runs his philanthropy like a business. The foundation’s chairman urged donors to set measurable goals and work with governments and businesses to maximize impact.
• The Gulf’s wealth transfer could reshape charitable giving. Badr Jafar, the UAE’s special envoy for business and philanthropy, told Semafor that more than $1 trillion will change hands in the region by 2030, accelerating a shift toward impact-driven philanthropy.

Companies in Japan and South Korea were hit with major cyberattacks, exposing millions of customer records and feeding fears that AI may be turbo-charging hacking efforts.

The revelations come days after Chinese and US models were used to steal hundreds of thousands of credit card details, a breach an analyst called one of the “most severe abuses of AI for exploitation” on record.

Corporate leaders, especially in finance, say industrial-scale AI hacking represents a severe threat to business, with many racing to adopt the technology themselves as the only antidote.

Some may already be too late: “There’s a misconception that the AI vulnerability race is imminent,” an expert at Google said. “The reality is that it’s already begun.”

The EU trade commissioner pressed China to balance trade with the bloc, but major divisions between the sides in negotiations and rising tensions have dampened hopes for a breakthrough. Europe’s trade deficit with China has sparked growing alarm on the continent, which fears Chinese goods will hollow out its industries, driving job losses and economic anxiety that ultimately fuel the rise of nationalist parties.

Brussels had initially proposed Beijing voluntarily cap the number of hybrid vehicles it exported to the EU, but China rejected that proposal. Experts instead warn of a looming trade war, with Germany and France calling for the EU to ready new tools that could combat China.

France’s challenges mounted as concerns over its ballooning debt weighed on economic activity and reverberated across Europe. Economists argue planned government spending cuts do not go far enough and political divisions — far-left and far-right parties instead want the European Central Bank to buy up or even cancel French debt — suggest Paris’ proposed budget faces an uphill battle to pass.

Political uncertainty is hampering business investment, France’s biggest business group has warned, while anxious consumers are holding off on purchases. The challenges are manifold: “Rising debt levels, persistent fiscal slippage, elevated borrowing costs, and political uncertainty [will] increasingly test the credibility of France’s fiscal strategy ahead of the 2027 presidential election,” a Morningstar analyst wrote in a note to clients.

Alphabet’s Isomorphic Labs is reportedly in fundraising talks at a $40 billion valuation, the latest sign of strong investor appetite for AI despite growing fears of a bubble.

The company — led by Nobel Prize winner and former Google DeepMind CEO Demis Hassabis — hopes the new investment will accelerate its push to develop new drugs.

Firms including China’s DeepSeek and Moonshot, as well as industry giant OpenAI, are also chasing billions in fresh funding as they look to stay ahead in the global AI race.

However, experts fear that the vast amount of spending on AI, which is on track to far exceed past investment booms, is creating a bubble that, were it to burst, would lead to “a far-reaching shock.”

Oil prices surged on fears of the Middle East conflict expanding, after Yemen’s Houthis attacked Riyadh for a second day. The missile strikes, which hit the capital’s airport and left at least three dead, come as Iran upped the pace of its attacks on vessels crossing the Strait of Hormuz.

Oil exports from the Gulf last month briefly topped prewar levels, but there remains a major shortfall of refined products: Diesel prices in Europe rose 8% on Wednesday. Even the release of stockpiles announced this week by the International Energy Agency was initially overstated: JP Morgan analysts said governments were, for now, more constrained by their willingness to use those stores than their overall size.

Fewer Americans are keen on businesses taking public stances on issues than they were a year ago, a decline largely driven by Democrats.

Forty-seven percent support businesses taking stances on current events, per Gallup — down from a high of 51% last year, as the Trump administration engaged in high-profile fights with law firms, private universities, and other organizations.

While 62% of Democrats now say that businesses should be taking public stances, that has declined nine points since 2025. Just over a quarter of Republicans say the same, down five points.

Majorities back businesses taking stances on free speech, climate change, DEI, mental health, and healthcare, while far fewer support positions on abortion and religion.

Corporations that have cozied up to the Trump administration are likely to be on Democrats’ target list if they win a House majority next year and take over investigative powers.

The News

Nigeria’s president is locked in a fierce reelection battle — one that is not just playing out among voters ahead of January polls, but pitting teams of lawyers and lobbyists against a lone litigant half a world away in California. Remarkably, this latter-day David just won a significant victory over Goliath.

For three years, Bola Tinubu has fought to keep old FBI records tied to a 1990s Chicago drug probe about him sealed, hiring US lawyers to support the Justice Department in the fight. His main adversary is not a political rival or a diaspora activist, however. It’s a Freedom of Information Act litigant in California with no apparent connection to Nigeria who says he just wants to get to the truth.

Tinubu’s efforts to prevent disclosure have partly failed. In August, the FBI acknowledged for the first time that it holds an investigative file on him and alongside the Drug Enforcement Administration (DEA) has released hundreds of pages of partially redacted records.

The fight now underway is over whether that is enough. On one side is Tinubu’s team of US attorneys, led by Chicago firm Henderson Parks. On the other is Aaron Greenspan, founder of legal document website PlainSite, who argues more documents should be released, with fewer redactions.

The FBI declined to comment on this story. The DEA did not respond to requests for comment.

Know More

The case centers around an alleged heroin trafficking network run from Nigeria: A 1993 affidavit drafted by an Internal Revenue Service agent describes the scheme, and cites an associate of the narcotics-selling group as saying the network’s ringleader — allegedly Mueez Adegboyega Akande, a businessman who had returned to Nigeria in 1990 — directed its finances by phone and periodic US trips — and that Tinubu helped move money for him. In the 1990s, Nigerian rings often trafficked drugs from Southeast Asia to Chicago via couriers, according to the Justice Department.

The Nigerian president has repeatedly denied wrongdoing. And his links to the case have been known and partially reported within Nigeria, often in the run-up to elections where opponents have used it to raise questions about his past. But the latest release — though unlikely to materially affect the results of the upcoming election — once again concentrates attention on Tinubu’s time in the US.

A young Tinubu first arrived in Chicago in the 1970s to study accounting, graduating in 1979. By the time of the alleged scheme at the center of this case, he split time between Lagos and the US, having risen to treasurer at Mobil Oil Nigeria, and eventually winning a seat in Nigeria’s Senate — all while still opening bank accounts, and moving “large” amounts of money in the Chicago metro area, according to the IRS affidavit. Bank records cited show Tinubu went on to deposit nearly $1.9 million in Chicago-area accounts in 1990 and 1991. Tinubu’s then-employers at Mobil Oil told investigators his treasurer role did not involve moving large sums and that the company never authorized him to hold its funds personally.

US authorities said that several of the transactions were linked to the alleged drug-trafficking ringleader Akande and seized roughly $460,000 from accounts tied to Tinubu in a 1993 civil forfeiture, alleging that the money was likely the laundered proceeds of drug dealing. Tinubu was not criminally charged, and the case was dismissed with prejudice after the money was forfeited.

Tinubu’s US lawyers have argued that the latest files that Greenspan wants released are shielded by FOIA exemptions that protect against “an unwarranted invasion of personal privacy.” In a filing, the lawyers said that curiosity about a foreign leader’s background was not a FOIA-protected interest, and described Greenspan’s requests as driven by Nigerian politics rather than by an effort to expose US agency misconduct.

They also said the records concern Tinubu’s life as a private “student” who “should retain his full privacy interests because he was not a public official in 1993.” However, Tinubu was not a student in 1993 — he had graduated over a decade earlier — and he was, in fact, a public official for most of that year, serving in Nigeria’s Senate until November. Greenspan protested the inaccuracies in subsequent filings, and Tinubu’s team later recanted the claims.

In a statement to Semafor, Henderson Parks attorney Christopher Carmichael argued that commentary on the case had outpaced the facts: “Interested persons and parties are attempting to infer what they believe may be in undisclosed records, but that is speculation.” He said Tinubu’s team would not speculate on non-public records while the FOIA case was pending.

Tinubu’s aides have long presented the 1993 case as a closed civil matter. In a July statement, presidential spokesman Bayo Onanuga called it “a civil forfeiture case from 1993 — a matter long settled, with no criminal conviction or finding of guilt,” and added that the issue had been “thoroughly litigated, explained, and rendered moot” by Tinubu’s electoral victories.

Representing himself, Greenspan said in an interview with Semafor that he had no personal or national stake in Nigerian politics and had kept his distance from partisans on both sides. He is not new to protracted fights with well-resourced opponents: A Los Angeles-area tech entrepreneur, Greenspan has spent years trading lawsuits with Elon Musk and Tesla, often alone and against larger legal teams. When a lobbyist for former Nigerian Vice President Atiku Abubakar — an electoral opponent of Tinubu — filed an amicus brief, Greenspan sought to make clear that the two were not working together.

The case has been a political flashpoint in Nigeria for years, flaring up ahead of the 2023 election that brought Tinubu to office and again now with the 2027 vote fast approaching. An organization retained by the Nigerian government has targeted Greenspan online. Another of Tinubu’s main opponents called it “profoundly embarrassing” that Tinubu was asking a foreign court to withhold his records.

Nonetheless, there are doubts about whether the matter is viewed as important by voters. Much like Tinubu’s presidential tenure, the campaign has been dominated by conversations around economic tumult and insecurity. “It is unlikely to impact [voters’] decision,” said Ebenezer Obadare, an analyst with the Council on Foreign Relations in Washington, “though the situation might change if a highly damaging piece of information unavailable previously were to suddenly turn up.”

Notable

• One of Europe’s most wanted criminals is using close ties to Sierra Leone’s first family to transform the West African country into a hub for his drug dealing empire.
• Questions over Tinubu’s background persist, with critics citing educational records that have shifted from his initial campaigns to present day.

Tight polls for Republicans are throwing future GOP leadership of the Senate health panel into question.

With Sens. Roger Marshall, R-Kansas, and Susan Collins, R-Maine, fighting difficult reelection battles, it’s unclear who will replace Louisiana Sen. Bill Cassidy as the top Republican on the Senate HELP Committee.

Sen. Rand Paul, R-Ky., is the next most senior person, but he would have to give up leading the Homeland Security Committee to helm the health panel. And Sen. Lisa Murkowski, R-Alaska, another member, could be in line to be the top GOP appropriator if Collins loses her reelection bid.

Sen. Tim Scott, R-S.C., would be next up after Paul and Murkowski, but he already leads the Senate Banking Committee.

It’s not impossible that Missouri Sen. Josh Hawley, a staunch abortion opponent, lands the role opposite Sen. Bernie Sanders, I-Vt., on the committee.

The News

Democrats are hoping to persuade Latino voters to get out and vote for their candidates in droves in the midterms. A Latino organization says they’ll have the best chance of doing that by presenting solutions to the economy, housing, and abuses by ICE.

Polling by Voto Latino shared first with Semafor shows 40% of Latinos backing Democrats on the generic ballot, while just 21% support Republicans.

The group argues that bringing more Latinos into the Democratic fold will require running on solutions to pocketbook issues: Latino voters rank the cost of necessities as their top frustration, and view food and housing costs as most unreasonable.

“This is where Democrats really have an opportunity to really bring back Latinos back to their corner,” said Beatriz Lopez, Voto Latino’s executive director. “I think this is a pure opportunity, and it’s not to be wasted because if they waste it right now, it’s going to be even harder in ’28.”

Know More

Voters are looking for “some long-term solutions, some short-term solutions,” said Lopez. Among those surveyed, Latinos who didn’t vote in 2024 were more likely than those who had voted to have economic frustrations, like struggling to earn enough money or find a good job.

“What we see in this poll is the people that are struggling the most are the ones who want the most,” said Voto Latino deputy director Ameer Patel.

Republicans have been hoping that the shift of Latino voters towards Trump and Republicans in 2024 would be part of a more durable trend, and drew new congressional districts in Florida and Texas to favor Republicans that relied in part on the Latino voting trends. Democrats, on the other hand, have hoped Latino voters would return to the left, motivated by economic concerns and the Trump administration’s immigration enforcement.

Immigration still remains a major issue for Latino voters. Asked about immigration solutions for Congress to tackle, Latino voters polled picked investigating ICE as a top priority, alongside immigration changes like a pathway to citizenship and ending the immigration detention of children and families.

The News

A bipartisan pair of senators wants to do something bold before a new Congress takes over: Fix the Senate’s frequently maligned rules.

No, Sens. Jeff Merkley, D-Ore., and Steve Daines, R-Mont., don’t want to end the filibuster. But they have a proposal that would allow more bipartisan bills to get votes, end time-wasting procedures, and actually allow popular bills to come to the Senate floor and pass, according to details reviewed by Semafor.

“More bills passed, more votes taken, less time wasted. That sums up,” Daines told Semafor in a joint interview with Merkley.

It’s a big undertaking for the odd couple, but the effort has more momentum behind it than one would expect. Merkley is the Senate’s resident rules expert and has literally written the book on Senate gridlock. Daines, who is retiring, is close to two of the people they’ll need on board to pass the proposal: President Donald Trump and Senate Majority Leader John Thune. When Daines started exploring how to fix the Senate, all roads led to Merkley, who wrote Democrats’ last rules change proposal and spearheaded the push to end the 60-vote threshold for nominees.

The senators told Semafor they hear plenty of complaints from their colleagues about the Senate’s sluggish progress as an institution. One senator can force a week of debate on a popular bill, the government often runs on zombie continuing resolutions, and securing an amendment vote often requires consent from all 100 senators. What’s more, plenty of time is wasted for antiquated time rules like the “intervening day” on legislation or “post-cloture time” — things Senate hopefuls aren’t exactly briefed on when they launch their campaigns.

“‘We had productive professional lives in functional institutions, and what the hell happened to the Senate?’” Merkley said, summing up complaints he’s heard from colleagues. “The American people are saying the same thing.”

“One thing you see here is people thinking about going home and being a governor. Why? Because states are not paralyzed the way the US Senate and House are,” the Oregon Democrat added. Daines agreed: “We have morale challenges now in the United States Senate.”

Know More

The two senators have four major asks: They want to get rid of procedural (known as cloture) votes to begin debate on nominees, bills, and amendments while retaining the ability for the lawmakers in the minority to oppose efforts to close debate on controversial bills via the filibuster. Under their proposal, the intervening day before a vote to break a filibuster would be eliminated and debate time condensed, removing dead time from the Senate floor.

They also want to establish a fast-track suspension calendar, not unlike the House, that would allow the Senate to more quickly take up bills at a supermajority requirement of two-thirds of the Senate. Debate time for those bills would be limited and require coordination from committee leaders in both parties to get on the fast-track.

Daines and Merkley also want committee leaders to have a one-day fast-track for considering popular bills with strong committee support from both parties that would allow those bills to pass the Senate with a simple majority. Finally, their proposal would give Appropriations Committee leaders a quick route to the Senate floor for popular spending bills with plentiful spending amendment opportunities.

It’s a tradeoff that would still allow the Senate minority to stop party-line bills or those without broad support and require real work by committee chairs and ranking members to get their products on the Senate floor.

But it would ensure that, like the House, a bill with two-thirds support can come to the floor quickly. It would minimize the ability of a single senator to block bills with huge support, like last week when Sen. Rand Paul, R-Ky., blocked the popular Kids Online Safety Act.

“The goal here is to not make this a political fight. I think what we have proposed here is durable, regardless of which party is in power. We realize the benefits, no matter if Ds or Rs have a gavel,” Daines said. “Across the last four Congresses, there have been 665 bipartisan bills passing through committees that go to the elephant graveyard.”

The pair is already talking to their respective party leaders about modernizing the Senate rules and they’re optimistic about getting it passed at the required 67-vote threshold for a rules change. Daines is keeping Thune apprised.

Thune spokesman Ryan Wrasse said “Thune is always open to discussing ways to make the Senate function in a more effective and efficient way, and he applauds Sen. Daines for thinking outside the box. Since no rules change can be implemented unilaterally, building a bipartisan consensus will be key to any modification of the existing process.”

Merkley said he talked to Senate Minority Leader Chuck Schumer and the Democratic leader “didn’t say, ‘stop the discussion.’”

Schumer and Thune “recognize that there is frustration and dysfunction that merits a conversation,” Merkley said.

Trump, of course, wants to just kill the filibuster entirely. But Daines said the president’s team is engaged in their talks too.

“We also ran the traps with key players in the White House. And got a thumbs up on it,” Daines said.

In an ideal world, they said they’d also move the Senate more toward a talking filibuster and restrict the use of party-line budget reconciliation bills in order to reduce deficit spending. But they are starting with what they believe are broadly popular proposals that could get the chamber to devote a time to debate the rules — preferably before Daines leaves office

That hasn’t happened for awhile. Recent changes to Senate precedent have been made using the unilateral “nuclear option” which can be done in a party-line fashion by the majority. The next time a party uses the nuclear option to change Senate rules, they might nuke the supermajority requirement altogether, Merkley warned.

“If we don’t solve this, eventually one team or the other is going to get rid of the filibuster,” Merkley said. “Then the Senate really does become the House.”

Burgess’s view

The senators are right — serving in the Senate kind of “sucks,” as former Sen. Joe Manchin famously put it. If you don’t know what a quorum call is, you will learn pretty quickly if you toss on the Senate livestream when the chamber is in session (it’s basically an empty Senate). It’s no wonder four sitting senators ran for governor this cycle.

Merkley and Daines are trying to find changes that everyone can live with, so their ideas could conceivably pass no matter who wins in November. But despite the happy talk, I have plenty of reasons to be skeptical.

Right now any one senator can stop a bill from passing quickly by themselves. So to give the Senate itself more power to pass popular bills, the pair will need to find 67 senators willing to dilute their own individual power — at least just a little bit.

It might be possible when no one believes the Senate is working as it should. The big question is whether, after a hard-fought midterm election, party leaders want to prioritize Daines and Merkley’s ideas.

French authorities suspended the use of stun grenades Wednesday after a teenager lost his hand during clashes with police, as demonstrations over school conditions spread to more than 40 cities.

Protesters’ weekslong blockade of schools is the most visible aspect of a multifaceted national crisis, as public workers strike, bond yields rise to multidecade highs, and France’s traditional parties reckon with the far-right.

But one proximate trigger of public discontent may have been overlooked: a ban on phones in schools enforced last month. Following the loss of this “comfort object” — which provides entertainment and connection — the “high school student has opened their eyes to a situation that has suddenly become unbearable,” a French teacher argued in Grand Continent.

British Airways announced what it said will be the world’s biggest business class section on its Airbus A380s, underscoring how airlines are racing to adapt to a growing premium sector.

Slowing corporate travel, a post-pandemic desire for more space, and younger customers splurging on experiences have shifted airline economics: A Qantas executive said last December that around 70% of business class customers on flights from London were leisure travelers.

Airlines, in response, have increased the number of premium seats, which generate around 3.4 times more per seat than economy ones, thereby boosting their bottom line at a time when higher fuel prices eat into profits. “The premium side of aviation is… going through a substantial overhaul,” Simple Flying wrote.

The market odds of a rate increase at the US Federal Reserve’s October meeting sank Wednesday after the central bank published minutes of its September meeting, though Fed watchers priced in a December hike.

While the Fed’s policymakers voted unanimously to raise interest rates last month, they were divided over the rationale for doing so.

Some sought to head off demand-driven inflation while others wanted to curb energy and AI-driven price shocks.

Last week’s cooler-than-expected jobs report, along with a rise in bond yields, bolstered the case for a pause: “The long end of the yield curve has already gone up, and that’s the end that matters to the economy,” a former Philadelphia Fed president told The Wall Street Journal.

Israeli elections this month will determine whether Prime Minister Benjamin Netanyahu — the country’s longest-serving leader — has shed the security failures preceding the Oct. 7 attacks.

Three years after Hamas’ deadly assault on the country, Israel stands more internationally isolated than ever: More than 85% of left-identifying voters, and 70% in the center, across Australia, the UK, Germany, France, Spain, Canada, and South Korea hold negative views of Israel.

“This spreading political toxicity stands as Netanyahu’s bitter legacy,” a Bloomberg columnist argued. The prime minister’s Likud party is not ahead in most polls, but “what is astonishing — politically, morally, strategically — is that Netanyahu has any chance at all,” The New Yorker’s David Remnick wrote.

The cost of hiring one very large crude carrier to move US oil to Asia topped $77 million, new data showed Wednesday, surging more than 700% from its 2025 average.

The Baltic Exchange reported the staggering numbers as attacks on tankers rose across multiple theaters of war. One was struck off Qatar Wednesday, after a drone strike sunk an oil tanker off Russia’s Black Sea coast, and two tankers were targeted in Bulgaria’s waters Tuesday.

Meanwhile, US efforts to staunch the flow of Iranian oil through its shadow fleet network, often through sanctions, have faltered: “They can just start another company,” one tanker operator told The New York Times. “Once you start sanctioning marine service providers, it will never end.”

US Secretary of State Marco Rubio said Washington would be “unapologetic” about its “pursuit of national power” at a speech in Athens, as America’s top diplomat made the case for NATO allies to build self-reliance.

“The course we take will determine whether the West maintains its place… or resigns itself to a future of atrophy and servitude and decline,” Rubio said.

His speech comes as US forces pull back from Europe and the Gulf: Washington withdrew bombers from a UK base this week, following troop evacuations from bases in Bahrain, Kuwait, the UAE, and Qatar.

The US’ military campaign against Iran was meant to demonstrate American power, The New York Times wrote. Instead, “the war has constrained it.”

Governments around the world are hardening their AI stances as more agentic hacks breach critical systems. South Korea’s president noted “considerable public concern and anxiety” following revelations that hackers used an AI system to execute recent cyberattacks against banks in the country.

And officials from OpenAI and Anthropic faced questions from lawmakers in Australia on Tuesday, after the ChatGPT maker drew criticism for not alerting Canberra fast enough after one of its models gained unauthorized access to a government health data portal during internal training and evaluation.

Tech companies are playing whack-a-mole around the world as their models get up to more hijinks and are used for malicious purposes. (It’s unclear what specific AI was used in the South Korea hack, though hackers reportedly used a Chinese-made open-source agent that can run on models from Anthropic, OpenAI, or DeepSeek.)

Insurers are also taking note, and preparing for multimillion-dollar lawsuits over rogue AI agents — and weighing whether executives could be held liable, the Financial Times reported.

US and Chinese tech companies are taking differing approaches to bring AI agents to the masses, the industry’s latest fixation. OpenAI’s recently released dots and Meta’s Muse are built around the assistant first and then sent out to use other companies’ websites and services.

Chinese counterparts, including Tencent’s Xiaowei — which is built into super-app WeChat — can, for example, place orders from businesses that are already on the app. It’s an obvious use for closed systems like WeChat and Alipay, which Chinese consumers already use for much of daily life.

Xiaowei’s strategy may not translate into revenue, the Hello China Tech newsletter wrote: Tencent earns no new fees from purchases, and early tests show it making mistakes. It begs the question whether the super-app strategy limits how useful Chinese agents can become since Xiaowei can only assist with what’s available inside WeChat, and other Chinese platforms have blocked agents from outside.

Muse and dots may not be a seamless experience either, given Muse has already been blocked by Amazon and both require users to turn over access to private systems, but their popularity already suggests markets are watching closely.

There’s a new kind of AI influencer flooding social media feeds — and they’re not even pretending to look like real people.

Higgsfield — which recently announced it hit a $1 billion run rate, and which boasts 30 million users — has updated its AI influencer tool, making it easier for users to insert a character of their own creation into existing videos. The characters are peculiar: They look realistic, but not quite of this world. Many have geometric haircuts, elongated necks, or other extreme bodily proportions that make clear they’re artificial. That’s by design.

“A flawless face is the fastest way for a character to read as generic AI,” a Higgsfield spokesperson told Semafor.

This odd aesthetic plays to AI’s strengths: Creating uncanny characters is a better use of the technology than trying to pass as human. It’s a more transparent way to create content that doesn’t deceive the audience the way deepfakes can.

Some of these AI-generated influencers have racked up millions of views and thousands of followers across platforms (some users are already using them to promote memecoins).

J.D.’s view

The race in the West to become the top open-source AI model shifted into higher gear this week, as both Nvidia-backed Reflection AI and French lab Mistral unveiled new models they hope will break China’s open-source monopoly.

The challenge looming over Beam and Le Chonk’s debuts (immediately my new favorite model name) is that they lag the top Chinese models and the leading closed systems from OpenAI and Anthropic on prominent benchmarks.

But Reflection and Mistral boasted in their announcements that they do beat other open Western models, such as those from Thinking Machines and Nvidia, suggesting the companies care just as much about the race against each other as the one with Beijing — despite US and European companies’ shifts to using more Chinese models over the past year.

Reflection CEO Misha Laskin told me his goal isn’t necessarily to dismantle the foothold Chinese models have achieved among developers and large companies. Instead, he sees a market in entities that can’t or won’t use Chinese models — think heavily regulated industries and governments — and might otherwise have no choice but to pay for closed American AI.

The timing of that pitch is opportune: Many businesses are heading into year-end budget reviews with eye-popping AI spend figures to account for. Governments are also bracing for sticker shock as $1-a-year pilot deals expire. New data from Ramp suggests companies are switching which AI providers they use more than ever.

The question that will determine the fate of these and other Western open-source players is whether businesses and agencies will tolerate less advanced models for some tasks in exchange for affordability and control.

Notable

• Businesses are finding it hard to budget for AI because the number of tokens a task will consume is hard to predict, The Wall Street Journal reported.

David’s view

Prick up your ears, and you can hear it — the sound of many different kinds of Democrats grabbing credit for midterm victories that aren’t official yet.

There’s Alexandria Ocasio-Cortez, assessing that when (not if) Abdul El-Sayed wins his Senate race in Michigan, the left will “break open the entire political calculus in America” — i.e., that progressives like them can win the Midwest. There’s Pete Buttigieg, making sure we know how many states he’s campaigned in (37) and how many candidates he’d endorsed (more than 100).

At this time in any campaign cycle, groups, candidates, and strategists pepper reporters with early claims that they were right. The election, they say, will be a referendum on issue, a validation of spending strategy, proof that ideas moved votes.

These takes aren’t immaculate. I’ve never deleted the October 2017 email from a strategist who was ready to explain why Ralph Northam lost the election for governor of Virginia. In fact, Northam won easily, and that strategist got strategically quiet.

As preposterous as it is, though, the pre-spin cycle matters, because anyone not ready to contextualize what happened to their benefit will lose face.

It mattered in 2020, when centrist Democrats burst out to blame “defund the police” activists for their party underperforming the final polls. It mattered after President Donald Trump’s win in 2024, when Sen. Bernie Sanders instantly blamed defeat on the party having “abandoned the working class.” That quick analysis shaped the conversation.

Populism won. This is the Sanders project — progressives’ entire project, really. The goal of recruiting swing-seat populists and getting them through primaries was to prove, as Ocasio-Cortez said, that their kind can win anywhere, which should matter for 2028.

This theory may be tough to sell. One of its proof points was supposed to be Maine, where Graham Platner humiliated the party establishment, then himself. Progressives won the insta-caucus that replaced him, nominating Troy Jackson to face GOP Sen. Susan Collins, and Sanders will campaign for Jackson this weekend after some internal grumbling about whether consultants not approved by the left were ruining his campaign.

Michigan’s the ballgame now. An El-Sayed win would, for progressives, be the story of the midterms. Most of the movement’s primary victories came in safe seats, but to take control of the 2028 story, they want to be talking about El-Sayed winning, Will Lawrence flipping back a mid-Michigan district, and Randy Villegas unseating Rep. David Valadao in California. They want to say that hand-wringing moderates were wrong, and pure populism can flip or hold swing seats.

But if El-Sayed becomes the first Democrat to lose a Michigan Senate seat this century, progressives will enter 2028 with empty hands.

Gerrymandering didn’t matter. This will be the biggest conclusion if Republicans don’t hold the House. And they’re already conceding partial defeat. “We’re not gonna win all 13 of those redistricted seats,” House Majority Whip Tom Emmer, R-Minn., told Axios this week. Indeed, Democrats are competing for most of the seats that Republicans tried to lift beyond their reach z– three in Texas, three in Florida, one in North Carolina, one in Ohio, one in Alabama, and as of this week, one in Tennessee.

When Trump first urged Texas to eliminate five Democratic districts, the most ambitious response was that Democrats could moderate and compete for them anyway. That did happen. Four of the Democrats whose seats turned redder voted with Republicans on a recent transgender health proposal; a fifth, Rep. Marcy Kaptur, D-Ohio, is running the most critical ads about “transgender ideology” of any Democratic incumbent.

While it might not decide who controls the House, gerrymandering did matter. It won’t have mattered enough if most of the remapped districts don’t flip.

Anti-trans politics stopped working. This is a complicated topic to spin; both LGBTQ rights groups and more cautious Democratic strategists are trying to set themselves up for it. “I hope that the headline coming out of November 4 is that equality voters won and anti-trans ads lost,” Kelly Robinson, the president of the Human Rights Campaign, told reporters on Monday.

Robinson wants that to be proven by victories for candidates who followed her group’s playbook, of responding to GOP attacks on a candidate’s gender voting record by answering them and pivoting. A small group of Democrats, like Kaptur, have used the language that activists find offensive; the HRC is ready to point to those defeats as evidence that using a conservative frame won’t win votes.

[Insert 2028 Candidate] was the strongest surrogate. There’ll be fast post-midterm calculations of which Democrats and Republicans endorsed, and campaigned for, the most winners in congressional races.

The model for taking a scorecard into a presidential primary comes from Richard Nixon, who refurbished his reputation by campaigning across the country for Republicans in 1966 and got some credit for a good GOP year.

But every would-be president has approached this differently. Rep. Ro Khanna, D-Calif., has endorsed scores of candidates, some of them extreme longshots. He’s not going for a batting average; he’s trying to show people that his politics, and the attention he got by releasing the Epstein files, give him broad appeal.

Buttigieg has gotten the word out that he can draw crowds in Republican districts, and that the candidates are happy to have him. So has Sen. Mark Kelly; he doesn’t have Buttigieg’s reach but he’s made it known that Democrats in the toughest seats are happy to campaign with the astronaut from a swing state. And isn’t it convenient that Kentucky Gov. Andy Beshear, who leads the Democratic Governors Association, has to keep going back to Nevada?

Every 2028 Democrat will get a scorecard, and there’s already some chatter about how few Democrats want to appear with Kamala Harris — the only potential candidate who several have said they won’t appear with.

The Latino vibe shift is over. This argument is already being written: Texas Republicans, and maybe even Florida Republicans, misinterpreted the 2024 Latino vote as a permanent shift away from Democrats.

Public and private polling has found the Latino vote slipping back to Democrats, who are recovering to where they were in 2018 and 2020, wrecking the GOP’s congressional map. The clear reason for this is Trump’s aggressive immigration enforcement policy, which swept in people with no criminal records, but some Democrats are already warning the party not to celebrate too hard.

“The vote is probably moving somewhere in the neighborhood of 15 to 20 points or more back to Democrats,” said Chuck Rocha, a strategist working for Latino Democrats in Texas. “[It’s] not because they’re in love with Democrats, but more they’re just so angry about the economic downturn with the overarching fear of ICE in their neighborhood.” There will be time for Republicans to adjust before the next election.

Notable

• In Politico, Jonathan Martin got some pre-criminations from Democrats who are already worried that they’re leaving winnable races for governor uncontested, because their donors think Senate races are the way to “stop Trump.”
• For CNN, Edward-Isaac Dovere looked at El-Sayed’s campaign in Michigan, and how Democrats were already processing what might happen if he doesn’t listen to their advice.

The News

Whatever happened to “abundance,” the pro-growth movement that many Democrats were going to hitch a ride on this election cycle?

They did embrace its ideas. They just don’t use the “a-word” that much.

In ads and across swing districts, Democrats are running on having “built more affordable housing,” supported “all-of-the-above energy,” and sliced through “bureaucracy and red tape” without mentioning “abundance” at all. Back home, some are talking about the permitting reform bill they’re trying to push through Congress, and the housing bill they already did.

“Resource development is about our survival,” former Rep. Mary Peltola says in one of her ads, highlighting how she defied climate activists to support Alaska’s Willow oil-drilling project.This year, after progressive activists accused the loose “abundance” movement, which favors targeted deregulation to spur growth, of trying to steer Democrats away from populism, groups working with local electeds forged ahead armed with polling showing how their ideas fit into the “affordability” framework that most candidate were running on.

“That early criticism of ‘abundance’ being a flash in the pan was a bad faith argument from people worried about what a powerful argument it was,” said Derek Kaufman, the founder and CEO of Inclusive Abundance. “I look at New York, where I live, where you have Gov. [Kathy] Hochul Mayor [Zohran] Mamdani changing environmental reviews for urban infill; you have Mamdani doing his version of DOGE, which he called COGE.”

In the Los Angeles mayoral race, Kaufman continued, “the more progressive-coded candidate is all about building housing to bring down costs.”

Know More

The criticism of the “abundance” concept got a wide airing in 2025. Last spring, after Ezra Klein and Derek Thompson’s “Abundance” hit the New York Times bestseller list, progressives attacked it as a dangerous off-ramp from populism — which could actually win elections.Skeptics commissioned their own polls to argue that “abundance” was a dead end. Last spring, Demand Progress tested a version of an anti-bureaucracy “abundance” message against a “populist” message that saw the latter winning out.

Four months later, Groundwork Action released data that found “excessive bureaucracy,” while a concern for some voters, “ranks far behind other concerns and tackling it does not strike voters as a direct response to the problem of affordability.”

To critics, the absence of the word “abundance” on the campaign trail is a sign of victory. Those sympathetic to the movement argue that’s not the case — and that there was never a binary choice at hand between progressive ideology and the ideas abundance advocates stand for.

“I don’t use the word ‘abundance’ when I’m campaigning,” said Rep. Kristen McDonald Rivet, D-Mich., “but I say all the time that when people think that the system is rigged against them, they’re right. It is. And a lot of the reason is what we’ve layered into government, where really well-intended ideas have the opposite effect.”

David’s view

Democrats are feeling very good about next month’s elections, and the jockeying is already underway about which faction made it happen. Progressives hope to power a Democratic victory in the House that sees them pick up more seats — and influence — in the next Congress.

When “abundance” critics went after the movement, they were trying to win the argument then as well as the argument of the future. They saw a coalition of techies and liberals who were trying to prevent what they wanted: A move to the left and away from deep-pocketed donors. They view “abundists” taking credit for Mamdani’s victory as opportunists trying to deny democratic socialists a major governing success.

But the non-socialists have made a modicum of impact, even if “abundance” has faded from Democrats’ lexicon. Thompson got Mamdani to agree with some of the “abundance” principles, and both agreed that the left can’t credibly compete with the new right if people believe progressive governments are tied down by interest groups and can’t build.

The argument continues.

Room for Disagreement

David Segal, whose group Demand Progress commissioned the first abundance-skeptical poll, argued that the abundance movement is all but dead.

“Having a primary message that is populist and then having a couple of lines about zoning or permitting reform is ‘offering a sop to abundists,’” he said. “It’s not ‘running on abundance.’ And it’s totally fine to do that, but it’s just not what Abundance (™) was arguing for when they rolled out their project.”

Notable

• In Politico, Riley Rogerson broke news of another “abundance”-pilled caucus in the House looking for a way to fund more big projects.

The Scoop

Every Thursday afternoon, a cadre of state AFL-CIO leaders meets on Zoom to advance a shared project: the “Contract with Working Americans,” a populist economic platform they devised independently of the national AFL-CIO.

These calls are a new organizing tactic for labor, which historically leads top down from Washington, and the goal is new, too: to mobilize not only workers who belong to unions, but the many more American workers who do not.

“We’re trying to connect two segments of a group that, quite frankly, should be naturally aligned, but just haven’t,” said Derrick Osobase, vice president of Communications Workers of America District 6, which covers Texas. “We are actively talking to working-class people who are not affiliated with the union, and wrapping them into an agenda that they have said will make their lives different.”

The idea for the “contract” was born of a paradox: Union membership has declined from 20% of all workers in 1983 to 10% last year, even as union popularity hovers at 90-year highs. Seventy-one percent of US adults approve of unions, according to Gallup, including 52% of Republicans.

The widening gap between those figures is where organizers see an opportunity.

“For years the labor movement, for understandable reasons, has fought for a narrower set of issues,” said Francis Eanes, executive director of the Maine Labor Climate Council. “But I think it’s made it easy for some folks to say we’re just another special interest out there fighting for our own.”

Skeptics of labor, he said, say a union is “a private welfare state that provides benefits to its members and no one else. I think it’s an unfair characterization, but it’s not entirely unfair.”

The Gallup numbers suggest Americans of different political shades seem to be concluding that private welfare states aren’t such a bad idea.

In a moment of declining trust in Congress, political parties, the media and many other institutions, labor activists believe a union-led movement whose stated aim is to agitate for the benefit of all workers could have real juice in setting a new national agenda as audacious as Newt Gingrich’s 1994 “Contract with America,” which helped produce a sweeping congressional majority for Republicans that year.

“Both political parties are wildly unpopular. Unions are more popular than ever,” said Matt Schlobohm, executive director of the Maine AFL-CIO. “It is really important that we — working people, the labor movement — define and put out an agenda and demand it. Or somebody else will define it for us, and it’ll be culture wars, or it’ll be some mealy-mouth opportunity agenda.”

The main tenets of the “Contract with Working Americans” were born out of a series of canvassing surveys led by state AFL-CIOs and affiliates. But there is no single document; iterations of it vary somewhat from state to state, to account for local trades and industries. (The national AFL-CIO did not respond to a request for comment.)

The “contract” framework was inspired by negotiated union contracts and is meant to establish policy commitments from candidates in exchange for the movement’s support. All versions include a set of economic priorities: Signatories must support lowering prescription drug costs by expanding the government’s power to negotiate directly with companies, expanding healthcare coverage, capping childcare costs, bringing down the price of gas, and raising the minimum wage.

The contracts adopt a populist tone throughout. They include shared language demanding a congressional stock trading ban and a ban on lobbying by elected officials after leaving office; a tax on billionaires; and, in a time of rising AI anxiety, a ban on AI surveillance, to prevent “robots deciding your paycheck, hiring and firing you, or monitoring your work.” The language does not include identity- or criminal justice-specific provisions, and largely steers clear of climate topics.

Several candidates with national profiles have signed on to versions of the contract so far this cycle, including in Texas, where Democrats hope that Senate nominee James Talarico and gubernatorial nominee Gina Hinojosa could make the state ground zero for a Blue Wave next month. Troy Jackson, the Democratic Senate nominee in Maine, delivered a public “Pledge to Working Mainers” adopting the demands in Maine’s contract.

Independent Alaska candidate Bill Hill, a commercial fisherman and teacher challenging Republican Rep. Nick Begich, told Semafor he supports the ideas in the contract, though there isn’t an Alaska-specific version of the contract to sign.

“This is about an agenda that delivers for the hardworking people of this country, by lowering costs, making sure hardworking people get the value of their hard work, and building a system where billionaires and big corporations play by the same rules we do,” Hill said in a statement.

Another state AFL-CIO, and its endorsed candidate for statewide office, have agreed to sign on as soon as this week, and more are circling.

No Republicans have backed one of these contracts. Organizers in North Carolina and Maine said that the campaigns for Republican Michael Whatley and Sen. Susan Collins had not responded to their outreach.

Still, organizers said they see progress. In interviews, most said they believe labor has long been too aligned with the Democratic Party, leading to a kind of “mutual malaise,” in the words of North Carolina AFL-CIO President Braxton Winston.

Eanes touted the contract’s potential to inject what he saw a bit of virtuous transactionalism back into the democratic process by energizing votes around specific policy demands, building back a kind of feedback loop that unions have down to a science.

“They have committed. We’re going to hold them to the fact that this contract has to be an essential part of how they govern,” said Osobase of Hinojosa and Talarico, though he declined to say whether that could entail supporting primary challengers in the future if either candidate gets elected and fails to deliver.

Know More

State AFL-CIOs and affiliates conducted thousands of surveys of union members and non-union workers over 2024 and 2025, gleaning insights that were then distilled down to the bullet points that appear in the contracts. The Maine, North Carolina, and Texas AFL-CIOs and their affiliates have knocked hundreds of thousands of doors already this cycle, presenting voters with the contract and where the candidates stand.

“This project for us is about reviving the best of the labor movement,” Eanes said. “If you go over the arc of the last 200 years, we win more when we’re fighting for everyone: When the demands are broader, when the demands speak to the needs of all working people, that’s where we have the most power and resonance, and frankly, at a moment when most people don’t trust any institution, they still see organized labor as something that can be trusted.”

The contract’s most striking divergence from progressive ideological currents is on AI: No version of the contract reviewed by Semafor demands a data center moratorium.

The buildout has been an “enormous boon” to the building trades, Eanes said.

“At its best, [a moratorium] is something that buys you time to actually come up with what the terms of engagement for this entire new industry and enterprise ought to be,” Eanes said.

Instead, Maine’s contract makes a series of requirements: Data centers must pay their own way, supply their own water and electricity needs, and, of course, tap union labor — demands echoed by organizers in other states. And the contract wraps the argument in populist language; The point is to “ensure working people determine the AI future, not Mark Zuckerberg and Elon Musk.”

Room for Disagreement

Though it produced sweeping gains for Republicans, control of both chambers — and, in the House, 12 years of uninterrupted Republican rule — little of Gingrich’s original “Contract with America” ever became law.

Jimmy Williams, head of the International Union of Painters and Allied Trades, which represents some 140,000 workers across the US and Canada, told Semafor that he felt that organized labor had “been left at the altar way too many times” by the Democrats. (“I believe personally that the Republican Party has done such a better job at being principled.“) But the fact that the contract exists and has adherents in Jackson and Talarico is an improvement, he said.

“The candidates that are emerging within the Democratic Party are getting the message right when it comes to how to reach working-class voters that have been divided now for the last 20-some years,” Williams said. “It’s the start of a real conversation about how to build a movement to meet this current moment, and the Contract with Working Americans is the best place to start having those conversations.” But it also “needs to go a little bit further” by “adopting real labor law reform.”

The organizers’ theory is that the Contract with Working Americans could prove more enduring than Gingrich’s 1994 platform, especially if it gains more pickup and high-profile signatories in swing states this cycle and after Nov. 3.

Its potency, they believe, comes from the fact that it’s decentralized, not organized around a personality or set of personalities, and policy-first. Immediate results on the scale of the 1994 off-year elections would be nice, but are not essential: Everyone I spoke to made clear they didn’t see this as a project that ends on Nov. 3.

“I was trained that politics is not just something you do every two to four years around election times,” said Scott Cooper, chief of staff at UNITE HERE, a North Carolina AFL-CIO affiliate. “It’s something that continues on between the cycles.”

Notable

• At The New Republic, Monica Potts profiled some of the union members running for statewide office this cycle. “Working people are tired of politicians who talk about their struggles without having lived them,” an AFL-CIO spokesperson said.

, by Didier Eribon.

After his father’s death, French philosopher Eribon’s trip to his hometown catalyzes a profound meditation on the socioeconomic tensions and disillusionment felt by many young French people. As an academic now living in Paris, he reflects on the role of class in the country’s educational system.

The book is a “virtuosic memoir of sexual awakening and of childhood within a French working class that now seems to have deserted the left,” The Guardian wrote. Buy Returning to Reims from your local bookstore.

Liz’s view

The bull market of the early 2010s was called the most hated rally in history. This one may be a close second.

Back then, investors underestimated the power and determination of the Federal Reserve to prop up a flagging economy. Flatlining corporate earnings, European debt bombs, and runaway government spending disappeared into a sea of free money.

Today’s problem is hyperscalers spending themselves into oblivion, spreading inflation well beyond Silicon Valley and obscuring problems nearly everywhere else. The S&P 500 hit another record yesterday, even as oil stays trapped in the Gulf and Europe tilts toward another debt crisis. The rally is driven by just a handful of AI companies. Some of them have the earnings to back it up — Goldman Sachs expects Nvidia and Micron alone to account for a third of the S&P 500’s earnings growth in the current quarter — but the return on their investments is far from certain, and far from now.

Alan Greenspan’s declaration that the Fed can’t deflate a bubble without wrecking the economy is far from economic canon, but it’s holding up in the AI era. Mark Zuckerberg and Satya Nadella aren’t slaphappy consumers who can be sobered up by higher rates. They are self-styled great men of history in an existential race and won’t stop spending until their shareholders make them. Their shareholders are very happy. You see the problem.

Notable

• “Increasingly, the market is running on one engine,” The Wall Street Journal wrote of the AI boom, while “just about everything else is going down.”

One thing was clear on Skydance’s first day of life: Beneath David Ellison’s velvet glove is Ynon Kreiz’s iron fist. To earn his $40-odd million payout to help run the combined Paramount-Warner Bros., Kreiz will have to serve as a Tom Wambsgans-ian pain sponge — the executor and cost-cutter behind Ellison’s lofty vision boards.

After Ellison told Skydance’s assembled employees at a town-hall meeting Tuesday that “there is something magical about” movie-making, Kreiz stated plainly “ultimately, our success will be determined by performance,” according to prepared remarks viewed by Semafor. Investors are warily eying Skydance’s freshly downgraded debt, and layoffs are coming. There’s only so far Hollywood and Washington connections can take Ellison before the reality of managing a debt-laden media giant forces him to prove he can actually run one.

Scott Bessent isn’t worried. The market is. The US Treasury secretary has been trying to reassure investors that economic growth and budget restraint can put the US government’s financial house in order. But he’s 0-for-3 on his 3-3-3 plan of increasing oil production, growing the economy, and cutting the deficit. His bond buyback program landed as a curious half-step — big enough to suggest concern but too small to make a difference. Tempers are flaring, WSJ reports.

Cracks are showing in the riskiest corners of the credit markets, always the first to surface confidence gaps. Take the loan market, where the amount of deeply distressed loans (those made to low-rated companies trading at 60 cents on the dollar or less) has ballooned to a level not seen since March 2020, as JPMorgan strategists pointed out this week. The biggest concentration of these highly distressed loans, of course, is in the technology sector, where SaaSpocalypse fears have eased among stock investors but not sandbag-packing credit investors. Rising global bond yields and Fed tightening haven’t helped. If Bessent “is the house now,” investors are calling his bluff.

Elon Musk’s SpaceX is the in-betweener in the AI capex wars. SpaceX’s reported $40 billion debt raise to buy Nvidia chips shows it is stuck between mature tech giants like Google and Meta and startups like OpenAI and Anthropic, whose private status tends to forgive their inability to pay their own bills.

SpaceX carries five times more debt than Alphabet, and three times more debt than Meta, relative to their respective profits, and while money from Starlink helps prop up SpaceX’s cash-guzzling rocket business, it isn’t nearly the cash cow that rivals’ ad businesses are. It needs to borrow because it’s spending more on AI than it’s taking in from the rest of its businesses.

By going public in June, SpaceX locked itself out of the raise-and-pray venture capital world. But its stock price’s sideways lurch since then makes it unattractive to issue new shares to pay for its growing AI tab. Its BBB credit rating is two notches below Meta and Alphabet, and a tougher sell with blue-chip bond funds; enter Apollo, which has a pot of money to match seemingly every risk out there (including cash-strapped governments!). Oracle finds itself in a similar position.

In the debut episode of , Cognition CISO and former Facebook security chief Alex Stamos goes off on the “nihilism” ripping through Silicon Valley.

He joins Semafor Tech editor Reed Albergotti to discuss the very real risks of AI, and the wholly imagined ones shaped by “almost religious beliefs” held by people at AI companies. “These things are not conscious, they do not have souls,” he says.

Stamos says he plans to “work the problem” to help shorten the inevitable “dark age” of cybersecurity. “What you should not do is just quit your job and freak everybody out,” he says.

Plus, why nobody would work for Mark Zuckerberg if he resembled Aaron Sorkin’s celluloid version in the upcoming film

Ethiopia’s prime minister reignited the issue of sea access for his landlocked country, potentially further inflaming regional tensions amid renewed fighting in its northern Tigray region. After being sworn in for a second full term, Abiy Ahmed told parliament his government would work diligently to ensure Ethiopia had “an outlet to the sea.”

Abiy, who has described this as an existential issue for his country, was not specific but neighboring Eritrea’s Red Sea port of Assab has long been seen by some in the government as a possible prize. It was part of Ethiopia until Eritrea seceded in the 1990s, leaving Ethiopia without a coastline.

In a statement prior to Abiy’s remarks, Eritrea, along with Egypt, Somalia, and Sudan, said control of the Red Sea was the “exclusive responsibility” of countries that border it. The tensions over maritime access come with Ethiopia locked in a domestic conflict, as well: An alliance of rebel groups have pledged to overthrow the government four years after the end of a civil war in which hundreds of thousands of people died.

South Africa is facing growing pressure from labor unions and business groups to provide around $600 million in fuel relief, after the Iran war drove petrol prices to record highs in the continent’s biggest economy.

The calls heap pressure on the coalition government to loosen its purse strings, threatening to undermine its reputation for fiscal discipline just as Finance Minister Enoch Godongwana prepares to present his three-year fiscal plan later this month.

South Africa’s biggest labor federation, Cosatu, described the price shock, which sent a liter of fuel above 30 rand (almost $2) for the first time, as “a cost of living crisis” because workers spend nearly a third of their wages on transport.

In response, the central bank has raised its main interest rate twice this year and warned in its monetary policy review this week that it has adopted a “firefighting” stance before energy prices spill over into broader inflation. The raised borrowing costs apply a secondary squeeze on households and businesses demanding fiscal relief.

China’s competitor to the dollar-denominated system that zips money between global banks saw record daily volume in August. A spike last spring, as the Iran war sent sanctioned companies looking for a way around Washington, now looks less like a blip and more like a permanent, if small, leg-up for Beijing’s efforts to build a parallel system of financial plumbing.

This isn’t the death of the dollar. New data from Atlantic Council researchers Jessie Yin and Lize de Kruijf shared first with Semafor, shows the greenback still underpins most global trade and foreign-exchange transactions. (Try converting Turkish lira to Indian rupees without going through the greenback.)

“The top line numbers all remain stable,” said Josh Lipsky, the Atlantic Council’s chair of international economics. “But look underneath the hood and there’s some worrying signs.”

China’s efforts to dethrone the dollar have so far mostly been a curiosity. Renminbi’s place in global central-bank reserve coffers has actually fallen since 2022, despite Beijing shoveling its currency into developing economies through central-bank swap lines. But crises can reset the board: The number of direct participants in Beijing’s cross-border interbank payment system has more than doubled since Russia’s invasion of Ukraine, and the resulting weaponization of Western financial networks to freeze Russian assets.

The Gulf is entering a costly new era of accommodating Iran, regardless of whether Tehran and Washington break their stalemate. Spending on defense, protecting energy and infrastructure assets, and creating redundancies in trade and energy flows will become standard, according to Karen E. Young, a senior fellow at the Washington-based Middle East Institute. These bills arrive as oil prices — expected to plunge if the Strait of Hormuz reopens — are unlikely to return to the levels that financed earlier waves of public investment, she writes.

Gulf states won’t have to foot the bill alone. Blackstone, Brookfield, and KKR agreed to invest $16 billion in July for a 49% stake in Kuwait’s oil pipeline network, the largest foreign investment in the country’s history. And BlackRock is stepping up its investments and hiring in the region, Semafor reported.

Abu Dhabi-based Eagle Hills signed a framework agreement with Syria’s government to build a housing development in Damascus and a tourism project in the coastal city of Latakia, advancing founder Mohamed Alabbar’s plan to invest $18 billion in the country. Alabbar said he would prioritize using Syrian contractors and sourcing supplies locally for the projects, which are expected to create more than 40,000 jobs but the value of which wasn’t disclosed, according to The National.

Gulf developers are piling into Syria’s reconstruction, part of a broader effort that’s aligned with US interests to fill the gap left after Iran and Russia lost influence with the fall of the previous regime in 2024. It also offers the UAE’s real estate titans growth away from their saturated domestic market — Sharjah-based Arada plans a $7 billion project west of Damascus.

The News

Fourteen major mining companies in DR Congo paid at least $20 billion to ineligible subcontractors between 2020 and 2025, the country’s subcontracting regulator told Semafor, citing recently completed checks.

These findings at mining businesses, among them subsidiaries of Swiss commodities giant Glencore, Ivanhoe Mines and Chinese-Congolese joint-venture Sicomines, have prompted the regulator to plan tougher inspections this month to tackle breaches of subcontracting rules. These include the longstanding use of Congolese figureheads to disguise foreign control.

Glencore declined to comment. Ivanhoe Mines and Sicomines did not respond to Semafor’s requests for comment by publication time.

The regulator’s move comes as the country courts new mining investment, including from the US, and seeks to ensure that Congolese partners genuinely own and help run the businesses supplying its mines, in line with its laws.

“We are open to partnership. But we don’t want people to come just for an extractive economy and leave us with holes,” Juan Ted Beleshayi, head of the Authority for the Regulation of Subcontracting in the Private Sector, told Semafor.

In recent weeks, he has ordered miners to terminate about 1,800 subcontracts with suppliers lacking valid registration certificates. These include contracts with 1,540 suppliers at two subsidiaries of Glencore, alongside those involving Ivanhoe Mines, Eurasian Resources Group and Sicomines. “We really only carried out a simple check,” said Beleshayi, who took charge of the agency just over three months ago. He said he had completed checks begun under his predecessor.

This month’s inspections would be “very detailed and rigorous,” said Beleshayi. Inspectors will check who owns the suppliers on paper, who calls the shots and who controls the bank accounts. Companies who fail to comply with the regulator’s decisions could face closure, he said.

Know More

Subcontracting represents billions of dollars to the Congolese economy — in 2025, 167 major companies declared $3.7 billion in contracts. The regulatory agency registers mining suppliers, which typically handle transport, machinery maintenance and construction among other work, and enforces rules based on a 2017 law that requires Congolese investors to own at least 51% of those businesses, with foreign ownership capped at 49%.

Chinese companies dominate DR Congo’s copper and cobalt mines and have often faced criticism from the regulator for shutting Congolese businesses out of subcontracting work. Beleshayi’s predecessor, Miguel Kashal, accused Sicomines, in 2023 of keeping all its subcontracts in Chinese hands. Three years ago, Sicomines pledged to give Congolese suppliers its secondary work. A company representative said that a misunderstanding over subcontracting rules had been resolved.

Beleshayi told Semafor his own inspections had found the same pattern. Sicomines did not respond to this claim. “We’re not saying foreigners have to leave. We just want a 49-51 split,” Beleshayi said. Limited financing and technical skills prevent Congolese suppliers from handling major mining contracts, researcher Fridolin Kimonge told Semafor.

Ownership checks and contract cancellations alone cannot address those weaknesses. “It is not enough to cancel; there has to be a plan behind it,” Beleshayi said. Temporary exemptions would allow foreign suppliers to help Congolese businesses become partners or competitors, he said. “We will look for Congolese who understand American culture or can adapt to it, to build companies together,” he said of incoming US companies.

Ruben’s view

Like many African countries, DR Congo struggles to enforce laws that exist on paper. Part of the problem with its subcontracting law is finding replacements for the suppliers who break it. Congolese businesses often lack the financing and technical skills to take over major mining contracts, limiting how far the regulator can act without disrupting operations.

Washington’s push to loosen China’s grip on Congolese minerals could give the regulator more options. Beleshayi expects American suppliers to accompany new US mining investments and form businesses with Congolese partners. If those companies can deliver the work and meet the ownership rules, existing suppliers would face competitors capable of replacing them. “Yes, absolutely,” he said when I asked whether that prospect could pressure companies already operating in DR Congo to comply.

Conflict in mining regions, disputed licenses, slow permitting, and unpredictable enforcement have long deterred Western investors, while Chinese operators have been better able to absorb those risks. DR Congo’s recent reforms and Beleshayi’s crackdown could help signal to the US and European companies it is courting that the country is becoming a more reliable place to do business.

Room for Disagreement

Transparency has long been a central demand in efforts to improve DR Congo’s mining governance and local ownership alone offers no guarantee that contracts benefit ordinary Congolese, say critics.

In a 2020 study of six mining companies, researcher Kimonge found that DR Congo’s subcontracting law required majority Congolese ownership but provided no mechanism to trace where the money invested in those businesses came from. He warned that gaps in the rules also allowed political and administrative officials to own suppliers and steer contracts toward their own businesses. “The situation has not improved much,” he told Semafor.

Mining governance analyst Jean Pierre Okenda called repeated denunciations of figureheads as “populist rhetoric” that does not go far enough and urged the regulator to publish suppliers’ real owners and their ties to officials. Otherwise, he warned, replacement contracts could go to another set of politically connected businesses.

Notable

• DR Congo has launched a geological survey aimed at improving knowledge of its vast mineral reserves ​to reduce exploration risk and attract investment into underexplored regions.

The News

The Nigerian state oil company’s disclosure that it spent $8 billion to protect energy infrastructure has sparked calls for an inquiry into how the funds were used and cast fresh light on the country’s inability to protect key economic assets.

Nigeria is Africa’s top crude oil producer and exporter, with sales accounting for around 90% of foreign exchange earnings. But oil revenue has been particularly constrained by theft and pipeline vandalism that has cost the country about $300 billion in recent years, compounding in a worsening security crisis that has hampered the overall economy. At the same time, there have long been concerns about the alleged misuse and diversion of Nigeria’s oil money, with the state company NNPC often at the center of the storm.

Analysts and government critics are now raising fresh questions about the company’s $8 billion security costs in 2025, which marks a 26% increase over the previous year.

“Nigerians cannot tell from these totals what was spent on pipeline surveillance,” Atiku Abubakar, a leading challenger to President Bola Tinubu in upcoming elections in January, said in a statement. “What was paid? Who was paid? For what work? Where are the results?”

Tinubu ended a fuel subsidy scheme three years ago that cost $10 billion in 2022. NNPC did not respond to a request for comment.

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NNPC reported a 33% rise in post-tax profit to $5.4 billion for full year 2025 on the back of Nigeria’s highest crude oil production output in five years. But its revenues fell year-on-year by 24% due to lower crude oil prices in the dozen or so months that preceded the onset of the Iran war this year.

It owns a 5,000 km crude oil and petroleum products pipeline network across Nigeria and recorded more than a dozen breaks along its pipelines last year and five in the first six months of 2026.

Alexander’s view

Election season in Nigeria comes with heightened sensitivity around money flows, especially when it involves the government’s largest moneymakers. And so the discourse around NNPC’s announcement that it will charge the government $8 billion for securing oil and gas facilities has assumed political undertones with polls set to open in about 100 days.

It may not account for much, however. NNPC has scaled through several inquisitions over the years, mostly unscathed, and is a much larger, consequential company for the Nigerian government than ever before.

Earlier this year, a Nigerian senate committee headed by an opposition party lawmaker ordered NNPC to account for nearly $160 billion in unreconciled figures in the company’s audited financial statements between 2017 and 2023. That matter remains unresolved. Calls for a probe into the latest controversial figures — which are far much smaller by comparison — already seem to be falling on deaf ears.

Room for Disagreement

Attempts to damage Nigerian oil pipelines fell by 87% between 2022 and last year, a private company contracted to guard the Trans Niger Pipeline in the southern Niger Delta region said in November. It credited the improvement with increased participation of communities in providing intelligence for security.

Notable

• TotalEnergies reached a final investment decision on a $800 million offshore natural ‌gas project last month which NNPC said affirmed the Nigeria gas sector’s “growing viability.”

The News

Ruben Gallego isn’t sure if he’s running for president yet, but he still has big plans for his Democratic Party once it’s back in power.

The Arizona senator is launching a huge, wide-reaching policy agenda on Wednesday that’s aimed at confronting a labor market — and workforce — getting reshaped in real time by the AI boom. He wants to raise the minimum wage and boost overtime pay while imposing taxes on data centers and automated jobs, in addition to creating a federal public works program to ensure US workers can cope with AI.

It’s a big move by the first-term senator as his party wages a pitched fight for control of Congress in next month’s midterm elections. He said he recognizes that the public needs to start hearing about what Democrats intend to do with control in Washington, if they wrest some of it from GOP hands this fall.

“People that are working right now don’t feel like their hard work is actually bringing them anything in return … and going into election season, people want to know where Democrats stand,” Gallego told Semafor in an interview this week.

“With AI becoming more and more prevalent in people’s lives and fears, I think it’s also important that we have a real forward-leaning policy that deals with AI and the workforce,” he added.

Gallego’s sweeping proposals certainly look like the policy engine undergirding a 2028 presidential campaign. He said he’s “not naive” about his work furthering that speculation, though he demurred on his future aspirations.

“No matter what,” Gallego said, “I’m going to be involved in” policy debates after the 2028 race.

“I’m not in the space right now to make a decision,” he added. “A lot of conversations have to happen between me and my wife, especially when it comes to raising kids and potentially running for office.”

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Gallego’s plan, which he pitches with a personal touch by invoking his upbringing and Arizona’s s recent run of rapid growth and economic change, touches almost every aspect of the American economy.

But he’s chiefly concerned with evident public views that wages are not keeping pace with rising prices — that the American “dream is slipping away from millions of Arizonans,” as he writes in his proposal.

On top of raising the minimum wage to $20 per hour and pegging it to inflation, his agenda would promote sectoral bargaining agreements to establish labor standards for entire industries, require companies to provide paid leave, and raise overtime pay for eligible workers from time-and-a-half to double pay.

He’s got equally ambitious plans for the AI industry, calling for a 10 percent excise tax on data center revenues and an end to tax incentives for those projects, a “robot tax” to discourage job losses due to automation, and consideration of a tax on AI tokens.

He wants to use that money to help fund a “New Deal-style” public works program to ensure the US won’t experience “massive unemployment” from the adaptation of AI.

“Data centers and AI companies cannot just be operating untouched and also unbothered in terms of what they do to our labor markets, to our communities. They need to be part of the solution and not just be a problem,” Gallego said in the telephone interview.

He also wants to prioritize reclassifying certain so-called gig workers as employees rather than independent contractors and require companies to give workers more notice ahead of mass layoffs.

Gallego said he’s ready to maximize Democratic authority to get it done. He proposed putting as much of his proposal as he can in a party-line budget reconciliation bill that Democrats can pass with a simple majority if they control the House, Senate, and White House come 2029.

He added that Democrats should not listen to the Senate parliamentarian if, for example, a minimum wage hike gets ruled ineligible for reconciliation (as it was in 2021).

“We shouldn’t be afraid to push the limits on reconciliation, on overruling the parliamentarian,” he said, arguing that Republicans have “already kind of blown up the parliamentarian primacy” anyway.

Burgess’s view

The rising class of Democrats has big ideas, and you can already start to see the party nearing a big debate about its agenda ahead of 2028. Gallego’s plan is one of the most expansive yet, but he isn’t the first to jump in.

Sens. Chris Van Hollen of Maryland and Cory Booker of New Jersey have tax cut ideas. Sen. Andy Kim of New Jersey wants his party to give kids universal health insurance coverage.

This bold flurry is a stark contrast with Democratic leaders, who would like to start really shaping their agenda … after the midterm elections.

Notable

• Former President Barack Obama is urging all Democrats to home in on AI as they shape their agendas, per The New York Times.

China appeared to move towards improving ties with the US ahead of two summits between the superpowers’ leaders due to be held by year end.

Members of the Asia-Pacific Economic Cooperation forum voiced fears that their concerns — including disputed territorial claims — were being deprioritized by China, which is exploring moving key elements of an upcoming APEC meeting online in order to prioritize talks with Washington, the Financial Times said.

While a recent summit in the US failed to deliver significant breakthroughs, the two countries are nevertheless considering reciprocal nuclear site inspections when their leaders meet in Shenzhen next month, CNN reported; Beijing has in the past been reluctant to enter into any arms control regime with Washington.

French politicians insisted the country would get to grips with its debt issues, but economists — and markets — signaled skepticism. Spreads on French bond yields over German ones have narrowed somewhat, but remain at elevated levels, a result of traders’ worries that French political polarization would hamper efforts to rein in a mammoth deficit and a legacy of state spending that has left a huge debt pile.

France’s finance minister told The Wall Street Journal that Paris would do “whatever it takes” to push through spending cuts, including bypassing parliament, though previous governments have been felled by divisions over the budget, while ING was unconvinced that far-right leader Marine Le Pen could actually deliver her plan for even more aggressive austerity.

High-profile investors warned of an impending AI bubble after tech stocks drove the S&P 500 and Nasdaq to all-time highs.

Gains for AI firms have overcome declines for financial, healthcare, and consumer-focused companies: “Increasingly, the market is running on one engine,” The Wall Street Journal reported, while “just about everything else is going down.” That has driven fears that any fall in tech stocks, which now represent a huge portion of many investors’ portfolios, could have dire consequences.

Bridgewater founder Ray Dalio told a conference in Singapore that he saw a “classic bubble” market that was close to bursting, while Temasek’s chief investment officer argued that an unwinding of the AI trade was the biggest risk to markets in 2027.

OpenAI announced hundreds of mathematical breakthroughs, stunning the field with the booming capabilities of its technology. The findings, which come weeks after the company said it had succeeded in cracking one of the most complicated problems in mathematics, raised questions over whether the model was using creative thinking or simply completing the final steps of human work.

Experts have argued that AI could be revolutionary for mathematics, but only if it gives the proof for a solution, as those techniques often form the basis of other breakthroughs. “I think there is a good future where we come out way ahead of where we are now,” a mathematician at the University of Toronto told Quanta.

Oil prices held over $100 a barrel as reports of increased supply from the Gulf were outweighed by signs that regional conflicts were merging, amplifying risks to key energy supply routes. Analysts said Iranian attacks on vessels traversing the Strait of Hormuz were increasing, and while Saudi-backed forces retook territory in Yemen from the Iran-backed Houthis, the latter group nevertheless remained able to launch attacks on Saudi sites and remained a threat to ships moving through the Bab el-Mandeb waterway.

Alleged Gulf involvement in conflicts in Sudan and Ethiopia also means that “instability will continue to ricochet in both directions,” an International Crisis Group expert wrote in Foreign Affairs, warning that “the overlapping conflicts and disputes will become harder to resolve.”

The News

Africa’s long-planned credit rating agency launches in Mauritius on Wednesday, the continent’s most concrete answer yet to years of complaints that the world’s biggest agencies overstate African risk and drive up borrowing costs.

The creation of the Africa Credit Rating Agency (AfCRA) comes as global agencies face growing criticism for relying on offshore models that some African leaders and policymakers say misread local realities — a debate sharpened this year by Afreximbank’s public break with Fitch.

AfCRA will rate governments, cities and companies, and it is meant to complement the three US firms, which control 95% of global ratings markets.

The new ratings agency “will add another opinion in the market place of opinions,” said Marie-Antoinette Rose-Quatre, head of the AU body that incubated it. She called it “a very tangible outcome of our aspiration to build our own financial institutions”.

Only three African sovereigns hold investment grade ratings, according to a background note from the AU’s African Peer Review Mechanism (ARPM). Thirteen are rated at very high risk or in default, and 23 have no rating from the big agencies, which cuts them from international bond markets. The AU has also said the continent’s external debt service costs climbed from roughly $60 billion in 2010 to more than $160 billion in 2024.

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The launch is part of a wider push by developing countries, at the G20 and the UN, to change how global finance prices their risk. South Africa used its 2025 G20 presidency to put borrowing costs on the agenda.

In an op-ed published in Africa Renewal, the UN magazine, Rose-Quatre and Ahunna Eziakonwa, the UN secretary-general’s special adviser on Africa, said unfair ratings cost Africa $74.5 billion a year — an estimate which was first published by the UN Development Programme in 2023.

Key details of the new agency remain unclear. The APRM describes it as privately owned and self-funded but has not named its shareholders, chief executive, or board. Mauritius Commercial Bank and the pan-African lender Afreximbank took part in a 2025 meeting to raise support for the project. According to the APRM note, AfCRA “will require a licence” from Mauritius’ financial regulator.

People close to the project say trust will take time. “Credibility in credit rating is accumulated rather than declared,” said Daniel Cash, a UK-based law professor who has advised the APRM on credit ratings. The real test, he told Semafor, will come when AfCRA issues a rating that a member state, “particularly an influential one” strongly dislikes. “Independence is demonstrated at the point of disagreement.”

The launch also comes as global agencies expand on the continent. Moody’s owns GCR, the largest issuer of ratings in Africa, and in July S&P agreed to buy a majority stake in Nigeria’s Agusto & Co. S&P Global declined to comment, while Moody’s and Fitch did not respond to requests for comment.

Tiisetso’s view

For half a century, the cost of African borrowing has been set largely in New York by three firms that rate the 55 countries from a distance. AfCRA is the continent finally taking a seat at the table where its risk is priced.

Every 10 basis points shaved off a $1 billion Eurobond saves an issuer $1 million a year. Twenty-three states have no rating from the big agencies at all, which locks them out of mandates that require one. That’s the prize.

True, AfCRA has no track record and no named shareholders, but the quickest route to credibility runs through pain: an early, well-argued downgrade of one of the governments that cheered the launch.

Room for Disagreement

Critics question whether investors will trust any agency created by the governments it rates. David Lubin of UK think tank Chatham House asked whether AfCRA amounts to Africa “marking its own homework,” adding that fund managers compare African borrowers with the rest of the world and an African agency “does nothing” for them.

Misheck Mutize, AfCRA’s chief architect, acknowledged that the agency’s main role would be to steer Africa’s $4 trillion savings into African assets rather than changing how foreign investors see the continent.

“The challenge here is that this is the bare minimum disclosure required before international investors can even begin to take AfCRA seriously,” said Bright Simons, head of research at IMANI, a think tank based in Accra, writing on public policy platform Katanomics Society.

Notable

• Nigerian President Bola Tinubu made the case for an African rating agency, arguing that the Big Three misjudge African risk and that a homegrown agency could spot progress early, which the global firms would later confirm.

The News

The largest privately held janitor service in the US is either a thriving business or a bankruptcy waiting to happen. It depends on which numbers you’re looking at.

Shares of Kellermeyer Bergensons Services, whose janitors clean 2 billion square feet of commercial property every day, have been written down to nothing. And valuations on several loans held by its biggest financial backer, a private-credit affiliate of KKR, range from nearly 100 cents on the dollar — a full recovery that is nearly unheard of when equity is wiped out — to around 10 cents. The chief investment officer of the fund, FS KKR Capital Corp., said on an earnings call a year ago that Kellermeyer had stabilized and was receiving interest from buyers. None has materialized.

Kellermeyer is one of a number of companies referenced in lawsuits filed in recent months that accuse funds managed by some of Wall Street’s biggest names of inflating their marks, often to increase their own payouts. The cases against FS KKR, Ares, and Blue Owl strike at the biggest question hanging over private credit: Can anyone trust its marks?

The firms dispute the allegations and say the fees they charge are fair and industry-standard. Kellermeyer didn’t respond to requests for comment.

Step Back

Unlike stocks and bonds, whose prices are quoted on screens across Wall Street, managers of private lenders have broad leeway to value their loans, with varying degrees of input from third-party services. These firms charge fees based on the value of their holdings, adding a financial incentive to keep the marks higher to avoid public scrutiny.

Last week, the Securities and Exchange Commission sent a rare warning shot to accountants, urging additional “rigor” in how private-credit firms are valuing the loans they hold and how risks are disclosed to investors. While it was couched in a technical note to in-house accountants, it signaled a watchful eye from regulators that have so far left the market alone.

The second-order effects are also crystallizing. Semafor reported this week that the Federal Reserve has been probing how banks that lend to private-credit firms vet the loans that serve as their collateral, an admission that has spooked investors on Wall Street and around the world.

FS KKR said it plans to “defend the matter vigorously through the appropriate legal process.” A Blue Owl spokesman said the lawsuits’ claims were “without merit and we intend to zealously defend ourselves.”

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The series of lawsuits, filed on behalf of investors in the funds, come not from a Wall Street ankle-biter but one of its consummate insiders. Jim Woolery was a dealmaker at the white-shoe law firm Cravath before leaving to run M&A at JPMorgan. He later became a hedge fund investor and now runs a boutique law firm, Woolery & Co., which is accusing Wall Street firms of clinging to high valuations to boost their own fees.  

The lawsuits also attack the practice of charging fees on paper IOUs that are racked up by borrowers unable to make cash interest payments. The additional debt, known as “payment-in-kind,” gives temporary breathing room to companies but can encourage can-kicking by lenders reluctant to acknowledge a dud in the portfolio.

In other words, the lawsuits claim, fund managers are charging fees based on interest they may never collect. More than one-third of the net investment income Blue Owl’s technology-focused lending fund reported last year was PIK interest, according to securities filings. The fund charged $468 million in fees, including an estimated $62 million of incentive fees related to PIK income that the lawsuits say investors should be able to claw back.

Notable

• There’s “good PIK” and “bad PIK.” Not all pay-in-kind is created equal.

Democrats are much more likely than Republicans to have confidence in the honesty of US elections, despite President Donald Trump and his party controlling Washington.

Sixty-three percent of Democrats say they have confidence in election integrity, according to Gallup polling, compared with 37% of Republicans and just 35% of independents.

For the first time this year, the Americans who disapprove of current US leadership are much more likely to have confidence in US elections than those who approve of it.

The polling punctuates widespread Democratic warnings about Trump laying the groundwork for interfering in the midterm elections by asserting more control over mail-in voting and dispatching Justice Department monitors to polling places.

It also makes the US an outlier: In the more than 100 countries Gallup polled, people who approve of the country’s leaders almost always have higher confidence in election integrity than those who disapprove.

The Trump administration’s recent changes to Trump Accounts could come under fire from the next Congress if Democrats win a majority.

The Treasury Department moved last week to automatically enroll tens of millions of children and greenlight donations of individual stocks as Treasury Secretary Scott Bessent touts the accounts ahead of midterms.

President Donald Trump “believes that the American dream belongs to every child and every family — and today, through Trump Accounts, we are equipping the next generation to claim it,” Bessent said in Pennsylvania this week.

But Democrats believe that the individual stocks lack statutory authority and that the automatic enrollment could prevent savers with religious or other concerns with the stocks from opting out, House aides told Semafor.

Libertarians expressed similar reservations: “There’s more than enough information available to people” that they “can decide on their own,” the Cato Institute’s Norbert Michel told Semafor. “It’s just not the case that the fact that they have something makes them better off.”

The Treasury Department did not return a request for comment.

Three years since the Oct. 7 Hamas attacks on Israel, the path toward peace in the resulting Gaza war remains murky.

President Donald Trump’s Board of Peace unveiled a $2.45 billion Gaza recovery plan at a recent meeting, but the endeavor’s eventual goals — getting Hamas to disarm and Israel to withdraw, and then rebuilding Gaza — remain far out of reach.

The Gaza war is one of multiple conflicts vexing the Trump administration, which has also struggled to wind down the Iran war and Russia’s assault on Ukraine.

The Oct. 7 attacks “were a horrific atrocity, and we remember all the victims who were killed at the hands of Hamas,” White House spokeswoman Olivia Wales said. “Three years later, there is a ceasefire, all hostages are home, and President Trump remains committed to ensuring Hamas can never pose this kind of threat again while helping the people of Gaza start a new chapter free from the tyranny of Hamas.”

A leading House Democrat is rolling out draft legislation to clarify liability for AI developers when their agents cause harm in direct response to the rogue AI hack of Hugging Face earlier this year.

According to an announcement shared first with Semafor, Massachusetts Rep. Lori Trahan’s “CLAIM Act” would make it easier for third parties to sue AI developers while clarifying questions around intent related to AI agents’ conduct.

“When someone breaks the law and hurts you, you can take them to court. That shouldn’t change just because the wrongdoer is an AI agent,” Trahan said.

Trahan, who previously joined Rep. Jay Obernolte, R-Calif., in a bipartisan push to draft AI regulations, is framing the liability push as a way to incentivize AI developers to embrace safety.

The legislation would also set a federal floor, rather than preempt state laws.

The Scoop

A coalition of nearly 40 labor, progressive, faith, and AI safety groups is laying out demands for AI legislation in Congress, warning lawmakers that any bill that crosses their red lines will face “active, mobilized opposition,” according to a letter shared first with Semafor.

The letter is spearheaded by Guardrails Action, the nonprofit affiliated with Guardrails Alliance, the super PAC launched in June as a counterweight to pro-AI election groups.

The group is calling for “independent, transparent government oversight with real enforcement power” and “a mandate that addresses human impacts from safety to economic disruption.” They also want to ensure that “AI models are not making final decisions such as denying people health care or benefits, firing or disciplining workers, or deploying weapons,” and that AI is a “universal benefit” to society.

In 2028, Guardrails will be organizing a coalition around a “populist demand for AI-related policy” but for now, the principles will serve as a floor for what the group and its broader coalition want to see in AI legislation, said Maya Handa, a senior adviser at Guardrails and former adviser and campaigner for democratic socialist New York City Mayor Zohran Mamdani.

“We want members of Congress and 2028 candidates to know that it’s not enough to come to the table with half measures, and they need to be ambitious,” Handa said.

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Handa likened the push for AI regulation to progressive calls for Democrats to support Medicare for All and the Green New Deal. “We want them to be forced to weigh in on what the New Deal for AI looks like in this transformative moment. And what they should say is: that they are not beholden to billionaires,” she said.

Other key groups that signed onto Guardrails’ letter include the American Federation of Teachers, the P Street Project, progressive and civil society groups, and the new group Who Decides run by Alex Bores, the former New York congressional candidate who faced a deluge of attack ads from pro-AI super PAC Leading the Future.

The group is not specifically endorsing or looking to knock down any specific bills in Congress yet, Handa said.

The associated PAC Guardrails Alliance announced today an ad spend of $1.2 million opposing candidates backed by the Leading the Future in California, Montana, and Arizona.

A Belgian-American scientist was awarded the 2026 Nobel Prize in Physics on Tuesday for his pioneering work studying “ghost particles” in the Antarctic.

Francis Halzen established a laboratory at the South Pole after discovering that the unusual clarity of its ice could be used to track subatomic particles called neutrinos, which otherwise pass undetected through the Earth and the human body: “We could catch them in ice, that ​was the goal,” Halzen said, adding that his discovery was comparatively minor compared with those the technique could eventually unlock.

“This is a new way of looking at the universe, and it will take bigger telescopes, many more telescopes, to become real astronomy,” he said. “And ​what this will bring is impossible to predict.”

China is expanding its efforts to drill ultra-deep oil and gas wells — defined as more than three-and-a-half miles deep — as the world’s largest crude importer steps up domestic exploration.

Like the US, China also broke oil and gas production records in 2025, though it has hastened its efforts this year in a bid to shield itself from war-related vicissitudes in global energy markets, The South China Morning Post reported, reflecting one prong of Beijing’s variegated energy approach.

China’s “enormous oil stockpiles, overland pipelines, new technologies to convert coal to chemicals, and embrace of green technologies have given Beijing strategic leverage” over its island neighbors, which remain cripplingly dependent on imported energy, Semafor’s China columnist argued.

India’s first bullet train is yet to transport a single passenger 10 years after the joint project with Japan broke ground, as the undertaking devolves into sniping and recriminations.

The route is expected to come into service next summer, albeit using slower trains that won’t cover the planned 316 miles. While a former Japanese minister said the delays are “100 per cent the fault of the Indian side,” unforeseen difficulties arising from COVID and land acquisition also derailed the initiative, the International High-Speed Rail Association’s head told The Indian Express.

Despite tensions, Tokyo and New Delhi remain mostly aligned, an Indian diplomat told the Financial Times: “The velocity of the bilateral relation is faster than the velocity of the high-speed rail project.”

The former head of Germany’s foreign intelligence service was arrested Tuesday on suspicion of treason and conducting espionage on behalf of foreign governments, in a major blow to Berlin’s security establishment.

Though the BND has historically been plagued by spying scandals — deterring some Western partners from sharing intelligence — August Hanning, who left the agency in 2005, is its first former chief to face charges.

The revelations add pressure on an intelligence establishment trying to remake itself after decades, and complicate Berlin’s efforts to counter Russia’s hybrid war, as lawmakers debate expanding the BND’s powers. But a ruling party lawmaker cast the arrest in a positive light, telling DW it shows that Germany “will not tolerate the betrayal of secrets.”

Drones struck two tankers in the Black Sea near Bulgaria on Tuesday, in the first attack on shipping in the NATO member’s exclusive economic zone.

The strikes come amid wars in Europe and the Middle East in which commercial shipping is regularly targeted, raising fears that the supply of endangered tankers could become the next energy bottleneck: Traffic in the Strait of Hormuz has largely rebounded, but only at great risk to tankers, 20 of which have been struck in the last month, suggesting recovery could be unsustainable.

The Iran conflict began “with a crude crisis… [that] turned into a product crisis,” the head of the world’s largest independent oil trader told the Financial Times. “It is turning into a shipping crisis.”

France could be on the precipice of a financial crisis, as escalating student protests roiled an already shaky bond market.

A pre-election debt selloff, lame-duck government, and massive demonstrations have raised fears that Paris’ budgetary crisis is untameable. Presidential frontrunner Marine Le Pen vowed deep budget cuts Tuesday to lower the deficit, but has also pledged to increase retirement benefits.

“In France we have this reflex of always asking the state for a bit of magic money — to pay, pay, pay,” a centrist lawmaker told The Wall Street Journal. France would likely get a bailout in the event of default, one economist noted, “but it is not too big for the markets to punish,” a former European finance minister argued.

The Centers for Disease Control and Prevention is “closely monitoring” developments in a suspected case of pneumonic plague that led to the death of a researcher in Russia.

“At this time, there is no indication of a broader threat to the United States, but CDC and our interagency partners are prepared and will continue to monitor the situation closely,” the CDC posted on X.

Paul Friedrichs, a retired military medical officer who worked as the inaugural director of the White House Office of Pandemic Preparedness and Response Policy under former President Joe Biden, said Russian officials could help alleviate the worst fears if they disclosed what the researcher was working on, when she developed symptoms, and when she was treated with antibiotics.

“What would really make me have trouble sleeping at night is if they continue to refuse to release really basic information,” Friedrichs said, adding that one key piece of information that should be released is the genomic sequence of the pathogen that killed the researcher. “It is understandable that people will assume the worst in a scenario when it would be so easy to disprove that the worst is occurring.”

Still, the biosecurity expert cautioned against projecting onto the Russians how the US would handle a biosecurity incident.

“The Russian culture and the Russian government bring security forces into all sorts of things that we would never, in normal circumstances, think about involving security agencies or military forces” in, Friedrichs said. “Assuming that their actions would look like ours, and then assuming because their actions don’t look like ours, it must be something nefarious — that’s a bad assumption.”

Rohan’s view

After Semafor reported last week that Chipotle had tapped bankers to fend off a potential takeover, we started digging to see might take over the $40 billion burrito maker. People close to the company tell Semafor that Chipotle hasn’t received a takeover bid, and we’re loath to peddle in deal rumors. But one theory that keeps coming up is notable, either because it highlights the dearth of good ideas out there or because it’s so out of left-field it just might bear entertaining: A Starbucks-Chipotle tie-up.

No, we’re not talking about a pumpkin spice burrito bowl (in fact, we’re begging Brian Niccol, the former Chipotle CEO who now runs Starbucks, not to go there.) But a Yum Brands-esque approach where — like KFC, Pizza Hut, and Taco Bell — the chains operate separately but combine their real-estate footprints and back-office operations makes sense on paper. Niccol worked at Yum for more than a decade and understands that scale matters in razor-thin restaurant margins. And Starbucks could provide a platform to grow Chipotle’s nascent international business. Starbucks declined to comment. Chipotle did not return a request for comment.

Of course, Starbucks would instantly rerate at a lower multiple if it pursued Chipotle, and would likely have to sell new stock to pay for it, further pressuring shares that are flat since Niccol took over in 2024. It would also require a pretty gutsy board of directors willing to make another bet on a CEO it’s still getting to know — and who has yet to prove out the turnaround strategy at his own company. There have been weirder marriages.

Notable

• Brian Niccol has an appetite for turnarounds, Semafor’s Andrew Edgecliffe-Johnson wrote earlier this year. Before Starbucks, he was already at Chipotle, which he helped revive after a food poisoning crisis to deliver a near 800% share price surge.

Iberdrola, the Spanish electric utility and renewable energy developer, surpassed Florida-based NextEra Energy as the world’s largest power provider by market capitalization on Tuesday, reaching above €141 billion. Iberdrola’s growing strength comes from its broader global footprint, which includes assets in Europe, North and South America, and Australia, a spokesperson said.

Both NextEra and Iberdrola have made major investments in utility-scale renewables, and moved to capture explosive demand from data centers and economy-wide electrification. NextEra could be back in the throne soon, however, if US regulators approve its proposed $67 billion merger with Dominion.

Tim’s view

As Russia again ramps up its attacks on Ukraine’s electricity grid ahead of the winter heating season, this time Kyiv has a new ally in its corner: El Niño.

Last week, 8,000 households around Ukraine temporarily went dark after the Kremlin’s first large-scale grid attack since last winter. It was a disheartening preview of things to come: Just seven months ago, Ukrainians emerged from their harshest winter since the full-scale invasion, when relentless bombardment of energy plants and substations left many with no heat and few hours of daily power access for weeks at a time. This week, Russia’s Defense Ministry made clear that more of the same is coming following a record campaign of strikes by Ukraine’s long-distance drones against Russian oil refineries in the past two months, which according to Kyiv have now taken out more than half of Russia’s refining capacity. Ukraine has good reason to be worried: Moscow’s offensive position in the air war has improved since this time last year, with the deployment of jet-powered drones and a gaping deficit in Ukraine’s missile defense supplies.

But a number of factors are working in Ukraine’s favor. Western aid for rebuilding the energy sector continues to flow in; some $250 million in energy hardware is expected for delivery between now and February, according to European officials. Ukraine is entering the winter with a natural gas surplus it didn’t have a year ago, and with a much higher share of its critical energy assets ensconced behind protective concrete barriers that are surprisingly effective at blunting damage from all but direct missile hits. More utility-scale renewables are online, and people and businesses across Ukrainian society have learned from successive bleak winters how to muddle through with batteries, generators, blankets, and candles.

Finally, and perhaps decisively, there’s the weather. Last year’s winter in Ukraine was the coldest in decades. That’s the factor that turns a blackout from an inconvenience to a deadly threat. This year, however, an exceptionally strong and possibly even record-breaking El Niño weather pattern — driven by warm ocean surface temperatures in the Pacific — is expected to make for a warm and wet winter in Europe. That’s good news for the EU, which is staring down a gas shortage. It could be problematic for Russia, which will also likely be warm but will be exposed to above-average food and fuel import prices. For Ukraine, it’s an asset. But I’m still looking for an apartment with a working fireplace.

Notable

• German Chancellor Friedrich Merz announced another €1 billion in military aid to Ukraine during a visit to Kyiv, and €350 million for repairs for the energy sector.

, by Kevin Roose.

With rigorous reporting and more than 150 interviews with those working for the US’ most influential AI companies, technology journalist Roose covers Silicon Valley’s breakneck race to build artificial general intelligence.

Roose’s account is “clear-eyed, deeply reported, and brisk,” Publishers Weekly wrote, offering “an indispensable window into how the world arrived at a precarious technological inflection point.” Buy The AGI Chronicles from your local bookstore.

Liz’s view

The keys to succeeding on Wall Street are to a) make money and b) make money differently than others. Performance is table stakes; outperformance gets you the glory.

AI is messing with that logic. Nvidia’s $500 billion consortium includes the four largest alternative-asset managers in the world and six of the top eight. Blackstone and Apollo are jointly providing billions of dollars for Anthropic to buy compute. Anthropic’s AI-for-the-real-world consultancy offshoot raised $1.5 billion from Blackstone, Hellman & Friedman, Goldman Sachs, General Atlantic, Leonard Green, and Apollo. Nearly every big private-equity firm not on that list is backing OpenAI’s competing version. (Goldman, being Goldman, is in both.) Here is a handy chart.

This is not how things usually work on Wall Street, where the goal is to snake investments away from rivals, not share them. The last time private equity clubbed up on deals too big for any one of them to handle solo, we got some of the worst buyouts in history.

Some of the crowding can be explained by the sheer amount of money needed. “Why can you get five or six of the leading players at one table? Because there’s enough to go around,” Brookfield Asset Management CEO Connor Teskey told me last week. He thinks there will still be winners and losers in the AI trade as investors stake out corners within it; Brookfield has made bets on sovereign AI in Europe, Blue Owl is an AI landlord, Apollo is a lender willing to take on chip risk.

But whether those are different bets or marketing gloss for the same big bet is less clear to me. AI is starting to look like an “IBGYBG” trade, a Wall Street phrase that made it into the US government’s postmortem report on the 2008 subprime crash: “I’ll be gone, you’ll be gone.” Everyone wins if it works, even if nobody looks like a standout genius. Everyone loses if it doesn’t, but nobody looks like a standout moron.

The irony is that the investing world wasjust returning to a place where outperformance seemed possible again when AI arrived. Two decades of easy money had made everyone look like undifferentiated geniuses. A more fractured, risky, and dynamic world of wars, inflation, and tariffs might have encouraged investors to zig where others zagged. “I think we’ll start to see the pull of groupthink become a little weaker, and contrarianism start to pay off,” I wrote in early 2024. Oops.

Notable

• A recent PwC study estimates global spending on data centers alone could top $30 trillion through 2050, a buildout the firm says would surpass infrastructure booms such as railroads, the internet and electrification.

Dubai’s priciest license plate, P7, sold for $15 million in 2023. Yet the resale market has run largely on Instagram and independent brokers. A new app, Mazal, aims to change that by holding buyers’ funds in escrow until ownership is transferred, for a 5% fee. Its founders say plates worth $463 million have changed hands in three years, and that the market is growing by about 20% a year. License plates command huge sums in the Gulf, where every opportunity to signal status is welcomed — but proceeds from the government-run sales go to charity.

Mazal grades plates like gold — 18, 21, or 24 karat — with a top tier called mithali, Arabic for perfect. “The only question is whether you are a millionaire or a billionaire,” said Chairman Abdulla AlMeer in an interview with The National. AlMeer’s green Range Rover sports a $245,000 plate. His Lamborghini, tragically, has to make do with a $136,000 one.

Saudi Arabia’s expatriate workforce shrank for the first time in more than two years, amid layoffs, the Iran war, and a backlash against hiring foreigners at state-controlled companies. Foreigners employed in the country, excluding domestic workers, fell by 16,000 in the three months to June, driven by a drop in construction jobs, according to the government’s quarterly report. Medical insurance policies for expats didn’t grow at all in the first six months of 2026, another indicator that fewer foreigners are coming to the kingdom.

State-controlled firms have been trimming workforces or not renewing contracts as budgets were cut for some projects, while others, like NEOM, have scaled back significantly. The Iran war has also dented the region’s reputation for safety.

The unemployment rate for Saudi citizens hasn’t budged and the economy is creating new jobs, albeit at a slower pace. Forward-looking data from the Purchasing Managers’ Index suggests hiring will bounce back.

Abu Dhabi is backing a rail link to enhance the logistics behind Jordan’s main exports. The 403-kilometer network will carry 16 million tons a year of phosphate and potash, used in fertilizers, from mines to the Port of Aqaba. The line, which will replace truck convoys and an aging freight track, is expected to cut transport costs by $40 million annually.

Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed and Jordan’s King Abdullah II broke ground on a $2.3 billion project, part of a $5.5 billion investment framework the two countries agreed to in 2023. The UAE is investing in rail infrastructure across the region, including Etihad Rail at home, Hafeet Rail to Oman, and other links that are part of a planned India-Middle East-Europe corridor, which would run through Jordan.

The News

BlackRock is ramping up its commitments to the Gulf as the world’s largest asset manager seeks to boost exposure to a region that it expects to use more of its vast state wealth to invest domestically in the wake of the Iran war.

Despite no resolution to the conflict, now in its eighth month and keeping the Gulf in a state of suspended uncertainty, the firm is “undiminished in our focus” on the region, said Ben Powell, chief investment strategist for the Middle East and Asia-Pacific at the BlackRock Investment Institute.

Counterintuitively, the bullishness stems from the region’s relative stability: “In terms of the rules of the game, the positive attitude towards business, not to mention human capital, financial capital, energy … I feel very confident that this is a story that is true and real and going to play out over the next five, 10 years,” he said.

Stability “in a world of great moderation, that’s not that interesting,” Powell said. “But in a world of excitement, that becomes much rarer … it is worth 10 times what it was in a world where everything’s okay.”

And increasingly, everything is not okay. Powell’s broader outlook is that persistent inflation, fragmentation, and higher capital costs will make investors more selective. “We’re all going to be incorrect more often … Where you can find confidence, grab it with both hands because it’s in short supply,” he said.

Know More

BlackRock, which manages more than $15 trillion, has offices in Abu Dhabi, Dubai, Riyadh, Doha, and Kuwait City. Powell said the Gulf will “continue to be a significant exporter of capital,” but that “at the margin, maybe some portion of that money that was going to flow out is going to stay at home.” He put the amount at $50 billion to $100 billion, and cautioned that the estimate has wide error bands. Powell tied that shift to the $2.1 trillion in strategic capital spending the institute estimates the Gulf states will make in its diversification push through 2030.

The bigger change, he said, is a focus on “societal and economic resilience” across energy, infrastructure, and the region’s build-out for AI, including “some projects where we hope utilization rates will be very low.”

Some of that spending is “almost an insurance policy,” Powell said: “We’re going to build pipelines we hope we never use.”

Through “a solely economic lens, that would not make much sense,” he said, but the need for redundancy as global geopolitical tensions rise means it makes “all the sense in the world.”

Powell also expects more spending where AI, energy, and defense overlap. “They’re all kind of the same thing now,” he said.

Step Back

BlackRock’s Global Infrastructure Partners is part of a $30 billion infrastructure partnership with Abu Dhabi sovereign wealth fund L’IMAD, national oil company ADNOC, and Singapore’s Temasek, announced in May.

The asset manager is among a growing number of global firms in Abu Dhabi’s financial center, ADGM, drawn by proximity to sovereign wealth funds like ADIA and Mubadala, family offices, and the region’s expanding appetite for private credit. Gulf capital is still flowing out at a record pace: the region’s sovereign wealth funds invested $53.9 billion across 108 transactions in the first half of 2026, an all-time high, according to Global SWF.

Notable

• Singapore’s Temasek will open its first offices in the Gulf early next year, joining a growing list of global investors expanding into the region despite ongoing conflict.
• OpenAI is in talks with BlackRock and UAE funds, including Abu Dhabi’s MGX, to raise as much as $30 billion, Bloomberg reported.

Indian authorities briefly detained the leader of the country’s main opposition party in widening anti-establishment demonstrations. The latest protests center around anger over a review of India’s electoral roll that has resulted in tens of millions of people being deleted; critics, who argue the exercise is politically motivated and anti-democratic, have demanded the head of the election commission resign, while the Supreme Court has said the government must hold officials accountable.

Earlier demonstrations erupted over mismanagement of a string of public examinations, and broader youth disenchantment with the authorities. “All over the world, democracy means people chose their government,” one protester told The New York Times. “But here, the government chooses who can be a voter.”

France braced for more intense student-led protests, as political upheaval ripples through Europe’s major economies. French youths have been demonstrating over poor conditions at school buildings, and analysts expect unrest to intensify after a teenager’s hand was blown off by a riot police sting grenade.

The country is already bitterly divided, with far-left and far-right parties leading opinion polls ahead of presidential elections next year. Germany and Spain face their own political turmoil: The former is in deadlock over tax proposals that, alongside a string of election embarrassments, threaten the governing coalition and could lead to the chancellor being ousted; the latter will hold snap elections after a key housing law failed in parliament.

Calls for AI regulation grew, though the White House showed little interest.

Writing in the Financial Times, one of the so-called godfathers of AI argued that it “should be approached like other critical technologies including medicine, aviation, and nuclear energy,” while the UN rights chief warned that unchecked AI development could let “dystopia creep in unnoticed” by undermining equality, freedom, and privacy.

Meanwhile, new Gallup research suggested the technology’s benefits have largely been concentrated among elites.

The Trump administration is facing pushback in Washington — two Democratic senators demanded answers over Big Tech’s influence on an unreleased AI regulatory framework — but the White House has argued any constraints would benefit Chinese AI firms racing to catch up to US rivals.

The EU’s biggest economies geared up for a clash with China, fueled by growing frustration with a bilateral trade imbalance that politicians contend is hollowing out the bloc’s industries. In a joint letter ahead of a summit of national leaders, France and Germany called for Brussels to enact proposals that allow for countries deemed harmful to be immediately cut off from accessing the bloc’s businesses and consumers; Paris and Berlin did not explicitly reference Beijing, but their complaints of “systemic market-distorting practices” made clear whom they had in mind.

The urgency of their push comes as major European companies undergo huge job losses — Volkswagen plans to cut 100,000 workers — which experts have said could drive political upheaval.

US Treasurys rebounded slightly after yields hit a near-quarter-century high, amid growing signs that increased borrowing costs are damaging the American economy. Yields across much of the G7 have surged in recent months as investors fret over stubbornly high inflation and unrelenting borrowing, with economists voicing particular worry over a potential European debt crisis.

The US, however, faces its own challenges: Several major commercial real estate deals have been thrown into doubt as buyers demand better terms, while lower-rated corporate borrowers have seen interest rates on their debt increase sharply. Goldman Sachs economists warned that elevated yields could cut US GDP growth by 0.2 percentage points next year, threaten the stock boom, and force the government to prioritize deficit reduction.

Andy’s view

For at least a quarter of a century, US military strategists have calculated that if China moved aggressively against Washington’s allies in Asia — by imposing a naval blockade on Taiwan, or threatening Japan’s vital sea lanes — the US Navy could, as a last resort, weaponize oil against Beijing.

Most of China’s seaborne oil imports flow through the Strait of Malacca, a narrow waterway that links the Indian Ocean and the South China Sea. Block that passage, the thinking went, and China’s economy would be crippled.

The war in Iran has shattered those assumptions. Not only has China’s economy survived the oil supply disruption largely unscathed, but its enormous oil stockpiles, overland pipelines, new technologies to convert coal to chemicals, and embrace of green technologies have given Beijing strategic leverage. By contrast, the island economies around China, including Japan, Taiwan, and the Philippines — all overwhelmingly reliant on imported energy — are struggling.

The Trump administration, meanwhile, is facing the increasingly fraught economic and political fallout of rising inflation as a result of the energy shock.

As long ago as 2003, former Chinese leader Hu Jintao raised concerns about what he called the “Malacca Dilemma,” revealing a deep insecurity that has been a key driver of Beijing’s industrial, military, and diplomatic strategy ever since. Indeed, the trillion-dollar Belt & Road Initiative is in large part a defensive maneuver, born of a desire to reduce China’s susceptibility to maritime threats from the US by looking inland to the vast Eurasia continent.

Today, Beijing has transformed what was once a chronic vulnerability into a source of strength and begun to redraw the geopolitical map of its region.

Eyck Freymann, a Hoover fellow at Stanford University and the author of , believes that now, a US blockade would have the opposite effect. “You’d starve out your allies before you starve out China,” he told me.

It’s no coincidence, Freymann said, that China has intensified its “grey zone” intimidation of smaller neighbors over the past several months as war in Iran drags on, prolonging the energy crisis.

Chinese coast guard vessels have increased patrols off Taiwan’s east coast, part of a wider campaign to assert law enforcement control over shipping routes around the island. Those moves have alarmed Japan, whose economy is dependent for its survival on open sea lines and which recently has been embroiled in a spat with China over remarks that Prime Minister Sanae Takaichi made about Taiwan. Beijing has also been stepping up its territorial claims within Philippine waters.

The blunt message that Beijing is sending, said Freymann, is that now, “China’s boss.”

What’s more, noted James Crabtree, the author of the forthcoming — on the “First Island Chain” in the western Pacific that he describes as the world’s most important geopolitical fault line — the Iran war has further exposed the vulnerability of US bases in the Asia Pacific, all within easy reach of Chinese missiles, while putting pressure on the US aircraft carrier force. For the first time in decades, the US 7th Fleet has no carriers operating in the Indo-Pacific.

With China emerging from the Iran conflict “looking relatively good,” said Crabtree, “the US now has decisions to make” on its military deployments in the region.

Some analysts argued that in striking Iran the US was actually delivering a devastating blow to China, its main geopolitical adversary and the primary customer of Iranian oil. Zineb Riboua, a researcher at the Hudson Institute, wrote that “the road to the Pacific runs through Tehran.”

In reality, China has demonstrated it has built multiple routes to escape an energy blockade; in effect, it has resolved its “Malacca Dilemma” — and turned the tables on Washington. US allies now face their own existential predicament, just as war in Iran depletes American power in the region.

Notable

• The former Indian ambassador to Saudi Arabia, Oman, and the UAE writes that “the likelihood of Malacca being monetized and, if necessary, weaponized, appears to be growing,” which has led to innovations that aim to bypass the strait entirely, most notably the construction of a new land bridge in Thailand.

The News

When immigration enforcement deaths sparked bipartisan calls for Kristi Noem’s resignation, Sen. Susan Collins privately lobbied her to stop the surge in Maine. When the Commerce Department cut off sea grants for Maine’s flagship university, Collins called Secretary Howard Lutnick to save them.

And when President Donald Trump hit Canada with new tariffs, Collins negotiated on the side with US Trade Representative Jamieson Greer to exempt concrete and road salt — the latter a critical commodity during Maine’s long winters.

In other battleground Senate races this fall, voters must choose between a combative Democrat and a Trump-friendly Republican. Maine’s battle pits that type of Democrat, former statehouse leader Troy Jackson, against a rarer breed in Collins: She’s the only incumbent Senate Republican who criticizes Trump in public while using her personal connections to reverse some of his actions.

It’s not clear whether Collins’ backchanneling will be enough to satisfy anti-Trump voters in Maine — or at least enough of them to put her over the top yet again. But her strategy will become a national political story on Tuesday night, when Jackson and Collins kick off a series of Senate debates.

Collins told Semafor ahead of the October campaign season that her “challenge is making sure that Mainers know what I’ve done” in unwinding some of the Trump administration’s decisions. She said Maine would lose her direct line to the Trump Cabinet if Jackson wins — and thus get robbed of tangible victories.

“When you take that kind of adversarial approach, you’re unlikely to get the results, and I got results,” Collins said in an interview, referring to her quiet talks with Noem. “The Troy Jackson approach would be to rant and rave about it, but never contact [her] directly.”

Despite Collins’ frequent breaks from his administration, Trump has largely laid off her and “by and large has given her a pass and even been complimentary of her,” said Sen. Kevin Cramer, R-N.D.

Yet he hasn’t made it easy for her to repeat her past odds-defying wins in a blue state: In recent weeks he’s sought to take over National Institute of Health grants and rescinded congressionally approved spending while repeatedly antagonizing Canada, which shares hundreds of miles of border with Maine.

“He’s making the lives of Maine families difficult, and Maine’s businesses and Maine’s communities difficult. And obviously, he’s not thinking about the implications for them or for me,” Collins said. “I’m not a focus for the president. I think that’s probably fair to say. But working families and small businesses and communities ought to be.”

Asked to respond to Collins’ comment, a White House official touted Trump’s “countless wins” in Maine, including a reduction in homicides and his tax cut law — which Collins opposed.

Know More

Collins handily won her race in 2020 despite trailing in the polls for months to Democrat Sara Gideon. Six years later, the Maine electorate is worn out by Trump, but polls still show the race as a tossup. Collins benefited from Democratic discord as the party jettisoned its original nominee Graham Platner over sexual assault allegations, replacing him with Jackson.

The national Democratic effort to defeat Collins kept going; now the party is spending millions on an ad hitting her for a ProPublica story about her links to a corrupt defense contractor. The ad alleges that, after an FBI investigation into the matter was dropped, that “maybe there’s a reason Susan Collins does whatever Donald Trump wants her to.”

The typically genteel Collins has a volcanic response to that line of attack.

“Anyone who knows me or has worked with me knows that I am a person of integrity, and that’s why I’m so offended,” she said. “It is clearly an attempt to try to persuade the people of Maine that I’m not who I am.”

And even with the ProPublica report, Democrats are focused on turning the race into a referendum on Trump — and, by extension, Collins’ complicated relationship with his administration.

“It’s hard to push back against Trump when you vote with him 96 percent of the time,” Senate Minority Leader Chuck Schumer told Semafor. “She has backed Trump and refused to go against so many of the bad things he’s done.”

Collins argues that her approach is consistent: She’s supported major nominees of presidents in both parties, opposed some moves made by both parties, and never aligned neatly with the GOP agenda. That assessment used to apply to quite a few senators in both parties. Now it’s a strange place for a Republican to be.

Of the 17 Republicans in both chambers who supported impeaching Trump after the 2021 Capitol riot, Collins is one of only five still in Congress. Another of them, one of her closest allies, said that blanket opposition isn’t always productive.

“That’s what people don’t get. Sometimes they just want you to ‘fight fight fight.’ Then on the other hand they say, ‘What have you done for me?’ And Susan is trying to deliver on both counts,” said Sen. Lisa Murkowski, R-Alaska, a fellow Trump critic.

Room for Disagreement

Collins has opposed Trump on upwards of a half-dozen major initiatives and worked behind the scenes to temper him on multiple other occasions. To her opponent, that’s window dressing.

“Maine voters aren’t stupid, and they see the game Susan Collins is playing,” said Jackson spokesperson Dan Gottlieb. “In the moments when it mattered, she sided with Trump to confirm the justices who overturned , give ICE billions more in funding, and advance legislation that cuts Medicaid while delivering massive tax breaks to the wealthy.”

Senate Democrats know Collins could win and continue to wield power atop the Appropriations Committee, so few are taking open shots at her. They still see her seat as crucial to establishing a more pugnacious anti-Trump majority.

“I’m not questioning her effectiveness. I’m just telling you, when they have the majority — and they have had the majority for two years — they have not stopped his actions,” said Sen. Patty Murray, D-Wash., who runs appropriations with Collins.

Burgess’s view

Forget everything else you know about this race. The fundamental questions are whether Trump will sink Collins, and whether her distance from him matters to Mainers.

Clearly her approach is working to some extent. The polls show her running well ahead of Republican gubernatorial candidate Bobby Charles, so clearly some percentage of voters are planning to split their tickets for her and Democratic gubernatorial candidate Hannah Pingree.

She’ll need every independent voter she can lasso into her tent to overcome Trump’s unpopularity. Just ask Jon Tester and Cory Gardner, two former senators whose states’ view of the national party made it impossible for them to win.

Notable

• Collins and Jackson will debate four times.

The News

The cryptocurrency industry’s leading network of super PACs is under scrutiny after revealing it will back 19 House Republicans but only 13 House Democrats.

Fairshake, which emerged as a kingmaker last election cycle, said three members from each party would receive $1 million ahead of November. But it did not provide a breakdown for the rest of its spending, even as skeptics pointed out that its list contained more Republicans than Democrats in tough races.

“The absence of [North Carolina Democratic Rep.] Don Davis is the most dangerous thing, because that’s a Dem who’s in a swing seat who’s not getting love,” despite backing the industry’s top legislative priority, one cryptocurrency executive told Semafor.

Last cycle, “there was at least the argument that Dems had driven them to this; this time, it’s been two years of going hard in on [President Donald] Trump.”

Know More

Hill Democrats privately grumbled about Monday’s announcement and the group’s decision not to support Democratic backers of cryptocurrency legislation like Davis and Rep. Kristen McDonald Rivet, D-Mich., who represent swing districts and stood to benefit from outside spending.

The vast majority of lawmakers on Fairshake’s list represent safe districts, facing only token opposition in their general elections. And the three Democrats named by Fairshake as receiving $1 million represented districts that have been competitive in previous elections but who are expected to win re-election this year.

Fairshake, which a spokesperson noted “has always been and always will be an issue-focused organization,” spent more in Democratic primaries than Republican ones this cycle. But Monday’s announcement is nevertheless fueling speculation that it could give the GOP a boost in Senate races by not spending against Sen. Susan Collins, R-Maine, despite her vote against the cryptocurrency bill.

“It’s completely full of sh*t,” another cryptocurrency executive told Semafor after Fairshake announced plans to spend against former Sen. Sherrod Brown, D-Ohio, last month. “The fig leaf of bipartisanship is no longer fooling anybody.”

As AI adoption spreads across the US workforce, new polling suggests that its benefits have so far been concentrated among those likely to hold upper-level positions.

Twenty-eight percent of US employees say they use AI at least weekly, according to a two-year study from Jobs for the Future, The Families & Workers Fund, and Gallup, while 54% say they haven’t used it at work.

Use of the technology on the job is much more common among those with college degrees and those in managerial roles.

Speed is the most common benefit that AI users point to, with 63% saying the technology helps them do their jobs faster.

Among those in the highest paid positions — people earning $10,000 or more a month — seven in 10 say it’s accelerating their work, while fewer Americans who earn less say the same.

Two Democratic senators want answers from Trump administration officials on industry influence on the still-unreleased AI regulatory framework, part of the AI executive order President Donald Trump signed earlier this year, according to a letter shared first with Semafor.

“We are concerned that the Trump administration is accommodating the interests of Big Tech CEOs rather than addressing the safety and security risks posed by increasingly sophisticated AI systems,” Sens. Elizabeth Warren, D-Mass., and Richard Blumenthal, D-Conn., wrote in the letter addressed to Treasury Secretary Scott Bessent, White House cyber adviser Sean Cairncross, and White House chief of staff Susie Wiles, among others.

The letter cites reported industry influence over what eventually became the executive order. It also highlights Meta CEO Mark Zuckerberg’s central role in shaping the more recent White House AI accord, pointing to the administration’s “cozy relationship” with and “deference to industry executives.”

The letter is the latest indication that Democrats are not giving up on a sustained push for answers from the administration on what is still a mysterious, voluntary framework for AI companies to submit their highest-level AI models to the government before release. Should the party gain power back in Congress, its demands will have more teeth.

“The American people deserve strong guardrails set by democratically elected officials, not a toothless framework shaped in secret by a handful of billionaires,” Warren and Blumenthal wrote Monday, pressing for answers to five questions by Oct. 19.

They asked for details on meetings and correspondence between industry and government officials leading up to the release of the executive order in June. They also want to know whether independent evaluators or other stakeholders beyond industry were consulted, and demanded a description of the pre-deployment testing process established under the framework.

The Scoop

The White House has formally sent Congress proposed legislation that would impose mandatory minimum sentences on those convicted of fraud involving federal benefit programs, according to a copy of it seen by Semafor.

The proposal, sent to House and Senate leadership on Sunday night, follows President Donald Trump’s call over the weekend for lawmakers to crack down on “fraud in Medicare, Medicaid, and Social Security programs.”

The administration’s language would establish a range of mandatory minimum sentences based on the amount of loss involved in fraud schemes, according to the document. The proposal would also bar courts from placing those sentenced under the provision on probation or suspending their sentences.

People found responsible for less than $40,000 in losses would face at least one year in prison; those responsible for between $40,000 and $250,000 in losses would face at least two years in prison; and violations involving $100 million in losses or more would result in at least 20 years in prison. All violations would carry a maximum sentence of life in prison.

It’s unlikely that Congress would be able to take up and pass the legislation during its post-election session after the midterms. With Democrats poised to take the House majority next month and the Senate also in play, the proposal also faces a steep climb in 2027.

Also included in the administration’s legislative proposal is language that would hold “any officer or employee of the state” personally liable if they knew about alleged fraud and “willfully, intentionally, or recklessly” ignored it. Such officials could also be financially liable for damages up to the “amount of all loss resulting” from the fraud, or if that loss exceeds $1 million, up to three times the amount.

Know More

Trump in recent months has empowered Vice President JD Vance to pursue fraud across the US, as he and other Republicans have sought to campaign on a familiar message of stopping waste, fraud, and abuse.

The administration has pursued a number of high-profile fraud claims, most notably in Democratic-led states such as Minnesota and California.

This is the latest crime-related push from Trump, who won his presidential election in part on a law-and-order message. The proposal now sits with Congress, where lawmakers will have to decide whether to take it up.

President Donald Trump is expanding access to tax-exempt diesel while simultaneously pledging a swift end to the Iran war, an implicit acknowledgment that his administration is running out of ways to significantly stem the conflict’s economic fallout.

“It’ll end very quickly, and prices are going to come down very sharply,” Trump said at the Nebraska rally Monday night, where he signed the executive order on so-called red-dyed diesel. “You might say, ‘Please, please, sir, it’s going down too fast.’”

Later, he again promised to pay every American $5,000 if Republicans come out ahead in the midterms, warning of a “1929 South economic depression” if Democrats win.

Republicans are cool to the checks idea, and despite Trump’s promises to wrap up the war, his administration has no clear way out of the conflict.

Brazilian stocks surged Monday after Flávio Bolsonaro emerged as the presidential frontrunner following first-round voting, with investors betting the right-wing candidate would win with a large enough majority to push fiscal reform.

“The conditions have never been this favorable,” an asset manager told Bloomberg, after Bolsonaristas won up and down the ballot Sunday, strengthening a potential Bolsonaro presidency that could target major spending cuts, bolstering the case for lower interest rates: Brazil has some of the highest rates in the world, which are partly to blame for the slowing economy that has weakened the incumbent.

Still, “neither candidate will have a free hand” on spending, given the difficulty of getting reform through the Brazilian Congress, a macro strategist told the Financial Times.

An AI-stock rally powered the Nasdaq to a record close Monday, as investors looked to Big Tech’s third-quarter earnings this month.

SpaceX, Nvidia, Meta, and Microsoft all gained, suggesting a kind of “inverse bond trade,” an investor told CNBC: “It’s buy tech, sell everything else.”

Demand for compute is strong enough that hyperscalers remain undeterred by higher borrowing costs, a dilemma for the US Federal Reserve: The AI investment boom is adding to inflation even as interest rates begin to bite elsewhere, suggesting the Fed may have to “hurt the part of the economy that is more rate sensitive,” Barclays’ global chairman of research told The New York Times.

US and EU officials said on Monday they were closely monitoring a suspected case of pneumonic plague in Russia that killed a lab worker in a Siberian research institute, prompting authorities there to quarantine dozens of people.

“We don’t have a lot of intel,” one US health official told The Washington Post: “We should be alert but not panicked.” Central Asian countries tightened sanitary border controls, even as the Kremlin denied reports of plague and urged media to “to ignore various rumors” amid widespread censorship, The Insider reported.

“Russia is well known to have an active military biological weapons program,” the Biden administration’s coronavirus response coordinator noted, suggesting that Moscow’s lack of transparency means “we have to build up our biodefense accordingly.”

Japanese Prime Minister Sanae Takaichi told investors to “rest assured” Monday after the country’s 30-year bond yield jumped to an all-time high on concerns over her government’s stimulus plans, though analysts cautioned that a change in rhetoric didn’t equal a change in policy.

Despite being “peppered with remarks aimed at… maintaining market confidence,” Takaichi’s speech to parliament “does not necessarily mean that policy will actually be adjusted out of consideration for financial markets,” a Nomura economist wrote.

Washington has urged Tokyo to rein in fiscal spending to shore up the weak yen, amid an intensifying global bond sell-off: The US 10-year Treasury yield hit its highest level in two decades Monday.

US President Donald Trump is preparing to issue an executive order expanding access to tax-exempt diesel, as he faces mounting pressure to ease near-record fuel prices with less than a month remaining before midterm elections.

“Refiners and fuel sellers are likely to absorb almost all of the added benefit,” a Bloomberg expert said, as the administration resorts to a kitchen-sink strategy to stem cost increases: Trump previously floated a controversial diesel export ban, but walked back the threat after winning emergency fuel releases from G7 nations.

Some long-haul truckers report paying one-and-a-half times pre-war prices, with one telling The Wall Street Journal he blames Trump despite voting for him in his first election as a US citizen.

Saudi-backed Yemeni forces said Monday they had expelled the Houthis from key areas surrounding the Bab el-Mandeb Strait on the Red Sea following a major counteroffensive.

Reclaiming coastal areas seized during the Houthis’ lightning advance last month curtails the rebels’ ability to significantly disrupt energy flows, but the counteroffensive — a hoped-for “zero hour” — among some Saudi and Yemeni pundits, could widen the Iran war, further upending energy markets: Saudi Aramco’s chief told the Financial Times that global oil stockpiles are now “scarily thin.”

The kingdom’s previous war against the Houthis resulted in a yearslong quagmire and devastating humanitarian crisis, but former Saudi intelligence chief Prince Turki Al-Faisal told that restraint “is no longer operable.”

The Scoop

The Federal Reserve Bank of New York has been visiting big banks to review their loans to private credit firms and understand their exposure to a financial industry that has unnerved investors and global policymakers.

Fed officials have gone into JPMorgan, Wells Fargo, Barclays, and Morgan Stanley since the spring with questions about overall exposure, risk-management, and collateral quality, people familiar with the matter said.

The Fed, JPMorgan, Barclays, Wells Fargo and Morgan Stanley declined to comment.

The review was prompted in part by JPMorgan’s move in March to mark down large swaths of loans in private credit portfolios, particularly those to software companies threatened by AI, the people said. The Fed has concluded its review of some of the banks, including JPM, said the people.

It’s not uncommon for the Fed to go into banks to review their holdings, particularly when there are frequent headlines about potential risks. The Fed also does regular on-site evaluations and continually surveys for banks’ risks.

Know More

Private-credit firms are one of the fastest-growing borrower sets for banks, which were chased out of risky lending after the 2008 crisis but have since found their way back into the trade by lending to the firms that replaced them. Loans to nonbank institutions have risen from $300 billion in 2016 to more than $1.5 trillion according to FDIC data, and now account for 11% of all bank loans outstanding.

Those loans are backed by private-credit firms’ own loans, a debt pile that has unnerved regulators. The European Central Bank also recently expanded a probe into private credit, looking at banks with exposures to the market. Last week, the Securities and Exchange Commission released a rare statement about fair value in private assets, serving as a reminder to lenders that they should be rigorous in their valuations and disclosures.

The Bank of England, during its September Financial Policy Committee meeting, said that private credit could be vulnerable to worsening financial conditions after testing the resilience of private markets.

The private credit market got slammed earlier this year when investors panicked about funds’ exposures to software companies, which suddenly seemed obsolete amid developments in AI. The concerns caused investors in certain types of funds to pull out their money at record rates — sometimes requesting nearly 40% of a single fund in a quarter, but most funds have capped at 5%.

Private credit lenders have long been criticized for the way they value their loans, or mark them, in particular when there is disparity between where different lenders value the same loan and when a company’s underperformance fails to translate to their marks. But lenders utilize third-party evaluators to create the marks and say they are making careful investments.

Redemption rates have declined at many of the private-credit firms and some investors have warmed to software deals again, as more of them find avenues to finance themselves both in and out of the private credit market.

Notable

• JPMorgan was early to reassess its valuations for loans to private credit companies.

The News

Reflection AI, the startup billing itself as America’s answer to open-source Chinese AI, is releasing its first model, called Beam.

The company, founded in 2024 by former DeepMind researchers, is positioning Beam as a “workhorse” that performs better than other Western open models. The model is particularly strong at coding and agentic tasks, cofounder and CEO Misha Laskin told Semafor. It also needs three to four times less computing power to reason through a problem than comparable open models, he said, making it faster and cheaper to run.

The model’s capabilities are comparable to one of China’s Z.ai’s recent models, GLM-5.2, which was released in June; Beam is “approaching” the performance of Alibaba’s most advanced model, Qwen 3.8-Max, which trails the top closed American models from OpenAI and Anthropic.

China’s startups and tech giants have led the world in open-source AI. Several large Western companies have recently embraced Chinese models as a way to reduce costs for certain repetitive tasks like customer service and writing routine code. Beijing has also promoted open source as a diplomatic tool to help other countries in their tech development. But because open models can be downloaded and run with fewer safeguards, their rise has also raised security concerns: US and UK government evaluators found that recent Chinese models could help hackers exploit code vulnerabilities.

New York-based Reflection sees a large market in businesses, governments, and other entities building sovereign AI systems that don’t or can’t use Chinese models, but still want to “own” and control how they use AI, Laskin said.

“They don’t really have very good options today,” he said.

Reflection is already training its next model, which Laskin said would be “much more” powerful and performant than Beam.

Know More

The startup, which has investments from Nvidia, Sequoia, and Citigroup, in June confirmed it closed its latest funding round at a $25 billion pre-money valuation. With Beam’s release, Reflection joins a slate of other Western startups, including Thinking Machines Lab and Mistral, that also offer open-weight AI models.

Its release comes as calls for AI regulation reach a fever pitch in the US, after a slate of alarming security incidents. The leading US AI labs and tech companies signed what US President Donald Trump called a “morally binding” agreement on safety principles following a White House meeting.

Trump has pushed for companies to regulate themselves, rather than subject them to federal oversight, but the political calculus could shift quickly should the Democrats take over Congress in November.

Reflection says it wants to enable “builders of open models to be able to contribute to the discourse that is happening in DC on regulation,” Laskin said.

“You want multiple voices around the table, both open and closed, and they should be working collaboratively on helping the government regulate AI,” he said. “We see this entrance as something that enables more open model perspectives to be part of the discourse in DC.”

Laskin said Reflection is working with both the US Center for Advancing Innovation and Standards for Super Intelligence and the UK’s AI Safety Institute to assess the model’s capabilities.

by Rebecca Perry.

Perry’s novel, shortlisted for the Booker Prize (and the only debut on the list), tells the story of a young-ish curator who is trying to understand the world of a medieval monarch who had been reluctant to take the throne. Specializing in , the curator seeks to evoke strong feelings of the past through her work at an old palace.

This setup allows Perry, a British poet, to explore how history takes shape: “It’s impossible to know anyone’s entire story in the small details and large gaps that make up a life,” Kirkus Reviews writes, adding that the book is “astonishingly layered.” Order May We Feed the King from your local bookstore.

Alexis’s view

“Policy without data is like guesswork.” Ghanaian lawmaker Albert Nyakotey Tetteh was making the case for better use of public sector data in infrastructure development when he said that in parliament last month. But his point rings true more broadly: For decades, a lack of data has held back economic development in countries across Africa.

Countries reeling from supply chain disruptions, energy shocks, and Western aid cuts are trying to comprehend the scale of the challenges they face in order to reset policies. Gathering relevant data is a vital first step to understanding everything from the value of underground mineral deposits to the money held in pension funds. As a case in point, the director-general of the Africa Centres for Disease Control and Prevention recently told me a health ministry audit in one country revealed half of salaried health staff were “ghost workers.”

However, shrinking budgets throw up a major challenge. In May, South African authorities said the average annual budget allocation for Statistics South Africa — the government department responsible for gathering and publishing official statistics — had fallen by 23% in real terms since 2019. The knock-on effect is a resource squeeze that has led to surveys being cut. At the same time, questions have been raised about the credibility of its figures. South Africa’s 2022 census missed nearly a third of the population, according to the statistics department’s own follow-up survey. A mismatch on that level distorts how public money is allocated.

The continent’s biggest economy, whose statistical analysis is comprehensive compared with most other African nations, is not alone in its challenges. African statistics offices are under mounting funding pressure, with donor-funded surveys cancelled or delayed since Washington ended funding last year for population surveys whose findings were used by governments to collate public health statistics.

But there is hope. Artificial intelligence can help by improving the efficiency and accuracy of statistical analysis. The UK’s statistics office recently said it is turning to AI to cut costs and improve data amid “squeezed finances.” The impact would be felt even more acutely if African officials use this technology to help take the guesswork out of policymaking.

Notable

• An Israeli team of scientists launched a mobile research lab this year that will collect data across east and southern Africa in an attempt to fill huge data gaps in global climate science.
  

Sub-Saharan Africa’s off-grid solar market is due to expand by 450% by 2035, with more than 35% of installations projected to be in Nigeria, according to a new report by global research firm Wood Mackenzie. Across the continent, persistent failures in national grids and growing populations have already created an off-grid “shadow” fuel market, predominantly led by diesel generators. However, the recent rise in fuel prices due to the Iran war, alongside the removal of subsidies in Nigeria and a significant drop in solar panel prices in recent decades, are driving the shift to solar.

Outside Nigeria, Kenya, and DR Congo are also projected to be major solar power hubs. For more of the continent to reap the benefits of solar power, however, blended funding models and consistent rural electrification policies will be needed to help bridge the power gap, the report warned.

Three junta-led West African states launched a joint television channel to offer programming in line with their push to de-emphasize Western viewpoints.

Tafouk TV, owned by Burkina Faso, Mali, and Niger, started broadcasting in September, has been praised by Russia’s ambassador in Bamako, and signed a cooperation agreement with the parent company of Moscow’s broadcaster RT to jointly cover events, according to RFI.

The three countries, which formed the Alliance of Sahel States in 2023, have simultaneously severed ties with France while strengthening engagements with Russia, particularly defense partnerships against jihadist insurgencies thriving in the semi-arid region. Moscow is also expanding beyond arms and intelligence support; Mali will be one of eight African countries where Moscow plans to build new culture and education centers known as ‘Russia Houses’ in the coming years.

The group made a pitch to London investors in late September for a planned London Stock Exchange listing of the cement unit that is currently worth $13 billion on Nigeria’s stock market. The firm is hoping to raise up to $1 billion, according to a person familiar with the plans.

Cement had been Dangote’s flagship product for decades. The group is Africa’s largest producer, accounting for 13% of the continent’s annual cement output capacity. The unit, which operates in 11 African countries and doubled its post-tax profit to $730 million last year, has pursued a London listing for over a decade and now plans to see it through this year, in a push to add international investors to its shareholder base.

South Africa’s foreign minister Ronald Lamola has publicly questioned whether US ambassador Leo Brent Bozell III should be in the job at all, the latest sign of how little goodwill is left between Pretoria and the Trump administration.

The deterioration in ties has simmered for nearly two years, raising fears that Washington may take more economically damaging steps after imposing visa restrictions on unnamed South African officials last month.

Lamola’s comments to South Africa’s Sunday Times came after Bozell said Washington had “run out patience” and that the time for dialogue had passed. Lamola said if Bozell is tired of talking, he ought to “get out of the kitchen … you can’t have a diplomat who says time for talking is over.”

Pretoria has now lodged two public protests against Bozell in seven months, accusing him of meddling in domestic politics. The Trump administration has pressured Pretoria on race-based policies designed to undo the legacy of apartheid. Priyal Singh, an analyst at the Institute for Security Studies think tank in Johannesburg, told Semafor he expects the sparring to continue at least until the US midterms in November as falsehoods that white South Africans face persecution have found a receptive audience among President Donald Trump’s conservative base.

Ethiopia said it had recaptured the capital of Tigray, dealing a major blow to the military alliance that launched an offensive against government forces last month.

Experts fear a renewed conflict between Ethiopia and the Tigray People’s Liberation Front could lead to a severe humanitarian crisis, after hundreds of thousands of people died during the 2020-2022 civil war.

The renewed conflict also threatens to spiral into a regional one: Ethiopia and Eritrea, which borders Tigray to the north, severed ties last week after Addis Ababa accused its neighbor of backing the rebel alliance alongside Egypt and Sudan. The decision marks a dramatic reversal, after Ethiopian and Eritrean forces united in fighting the TPLF during the previous conflict.

Many Gulf events have been postponed or canceled because of the war, but Qatar’s annual bonanza of bling was lively last week. More than 34,000 people attended the six-day Doha Jewellery & Watches Exhibition, and many — unlike this reporter — weren’t lookie-loos.

Doha’s exhibition center was transformed into a gallery of coveted gems and timepieces, with the cars at the valet reflecting the wealth of the clientele inside. Shoppers were reluctant to talk, but several said they attend every year because exhibitors (there were more than 50 representing 500 brands) bring in inventory that isn’t usually available in Qatar. One jeweler said sales in a single week were like Valentine’s Day, Mother’s Day, and Christmas all rolled into one. For those seeking iced-out Pateks, or more modest trappings, the exhibition returns in late April.

Abu Dhabi’s XRG is backing Argentina’s bid to become a major liquefied natural gas exporter. ADNOC’s international arm agreed in June to take a 32% stake in three Argentine gas blocks. They will feed the country’s first LNG export terminal, designed to produce 12 million tons a year in its initial phase. “No country or company secures its energy future alone,” Executive Chairman Sultan Al Jaber said in Paris last week.

At a time when exports from their home markets have been severely constrained, such international investments are only increasing in importance, helping Gulf producers meet customer demand and benefit from higher prices. This year, QatarEnergy took a stake in Golden Pass LNG in Texas, Saudi Aramco acquired an interest in the nearby Port Arthur LNG terminal, and XRG has bought into LNG projects in Texas and Mozambique.

Gulf sovereign wealth funds are on track for one of their most active years of dealmaking ever, even as war disrupts businesses and economic growth. Regional funds are forecast to invest $136 billion by year-end, making 2026 their second-busiest on record, according to consultancy Global SWF. Abu Dhabi’s Mubadala leads with $26.2 billion invested so far this year.

Nearly half of Gulf sovereign fund investment went to the US, showing that American assets remain attractive despite the debate about the future of Gulf states’ relationship with their main strategic ally. Gulf funds are major backers of the $110 billion takeover of Warner Bros.

Kuwait’s and Qatar’s funds may also be called on to transfer money to their government budgets to help prop up state finances, hit by the decline in oil exports through the Strait of Hormuz, Global SWF said. That won’t stop the funds from expanding rapidly in coming years, with Gulf funds set to control $8.8 trillion by 2030, up from $6.1 trillion.

There is new cause for alarm in the Horn of Africa. A week after a coalition of seven opposition groups announced an alliance to overthrow the government of Ethiopian Prime Minister Abiy Ahmed, fighting has broken out across several regions of the country of 130 million people. Led by the Tigrayan People’s Liberation Front, the militias of Ethiopia’s largest regions of Amhara and Oromia have also pledged their support.

Early battles have taken place along a critical commercial route leading east to the port of Djibouti, while drone strikes were carried out around the army’s main airbase near the capital, Addis Ababa. The choice of economic and political targets reflects the reality that even though the Tigrayans are weaker militarily than in their previous war that ended in 2022, they can still create asymmetric pressure on the government.

Ethiopia’s army is now quickly regrouping and is pushing the TPLF back into Tigray, where government forces have retaken the regional airport and now occupy the capital, Mekelle. As the conflict moves into urban areas, the risk of displacement and civilian casualties grows. And in a region already suffering from aid shortages, and anticipating even greater food insecurity from this year’s El Nino, humanitarians are rightly nervous about a potential catastrophic fallout.

But the Tigrayans and their “Alliance for Survival” allies believe they have an ace up their sleeves. A coalition of neighboring states, led by Egypt and including Eritrea, Sudan, and Somalia have reportedly been working in the background to support the Prime Minister’s armed opponents. Abiy’s announcement of building three new hydroelectric dams on the Nile, along with his threatening claims on the Eritrean port of Assab, and his army’s support for the Rapid Support Forces militia next door in Sudan have made him no friends across the region. All would like to see his ambitions contained.

With a fully internationalized conflict already raging in neighboring Sudan and long-time foe Eritrea poised to enter the fight on the side of the Tigrayans, the risk that Ethiopia’s conflict converges with existing regional instability and animosities is high. The fallout from a regional war on US priorities from counterterrorism to Red Sea security would be disastrous, which raises the question why isn’t the Trump Administration doing more to stop it?

On Oct. 4, the State Department urged Ethiopia and Eritrea to “exercise maximum restraint,” though curiously did not address the current fighting by Ethiopia’s internal armed groups. But back in June, the State Department sanctioned a group of Tigrayan officials for “undermining resolution to the crisis in Tigray” and last week the US ambassador in Addis blamed Tigrayans for their “poor decision to launch a large-scale offensive.” None of this suggests an even-handed approach this time around that would enable Washington to mediate an end to the violence as it did in 2022 to end the last Tigray war. This time, Washington has picked a side.

Rubio’s newfound prioritization of commercial diplomacy, reflected in the announcement last week of the sale of $5 billion in Boeing aircraft to Ethiopia’s national airline, speaks to Washington’s focus on economic returns over peacemaking. But that view is shortsighted.

Ethiopia’s double-digit economic growth and large infrastructure plans are vulnerable to the threat of nationwide war and regional meddling. The African Union has called for calm, but only Washington has the political leverage to manage a regional crisis. With Red Sea instability occupying more of Washington’s strategic focus, it would do well to prioritize peacemaking and ensure that Ethiopia’s economic potential is not undone by a descent into a region-wide conflict.

Oil prices fell as new data showed crude exports from the Middle East surpassed prewar levels, though any respite may be short-lived as attacks on tankers traversing the Strait of Hormuz increased. The rise in sales, according to data compiled by research firm Kpler, came alongside G7 nations releasing energy stockpiles in a bid to tame surging diesel prices.

Separately, liquefied natural gas cargoes exiting Hormuz also reached their highest level since the war erupted. The rebound has largely been due to a US naval protection program and strikes against Iranian radar sites, but Tehran has upped the number of strikes on vessels near Hormuz, threatening any energy trade resurgence. “Iran’s Hormuz leverage is fading,” RFE/RL noted, “but it isn’t gone.”

US President Donald Trump promised payments to retirees ahead of the midterm elections, which critics warn would worsen the deficit, stoke inflation and amount to bribery. The spending proposal — which comes after he pledged to pay all adult Americans $5,000 if the Republicans triumph — comes alongside Trump’s use of taxpayers’ money for television ads that praise his presidency, amid plummeting approval ratings over costs of living and the Iran war.

Though the former has dominated campaigning thus far, White House officials are increasingly worried about the latter: “I think that’s a real possibility that [Tehran] may want to inflict some pain on the president before the midterms,” one Trump administration official told Semafor.

Spanish Prime Minister Pedro Sánchez called a snap election next month after parliament rejected his proposed plan to tame public anger about the country’s housing crisis.

A temporary eviction of an 87-year-old pensioner from her Madrid home has galvanized demonstrations that have spread across Spain. Soaring property prices have upended European politics from Portugal to Germany, with the issue rising to the top of voter worries in several countries as prices race ahead of incomes.

Home ownership in the EU declined last year, data showed. Experts say the continent should take a page from the US: “If Europeans want to meet their housing needs, they will probably have to revisit their zoning systems, just like Americans,” Works in Progress wrote.

Brazil’s presidential election will go to a runoff on Oct. 25, after conservative challenger Flávio Bolsonaro unexpectedly emerged as the favorite in the first-round vote.

Polls seesawed in the runup to the election as both Bolsonaro — whose father was banned from running after having led a coup attempt — and left-wing incumbent President Luiz Inácio Lula da Silva traded corruption allegations, a key issue that defined the race.

A Bolsonaro win would confirm Latin America’s shift to the right: The seven most recent elections there have all been won by conservative candidates, most of them friendly to the Trump administration and its ambition of reasserting hegemonic power in the region to counter China’s growing influence.

The euro sank to its lowest level against the dollar since May 2025 over Spain’s snap elections added to mounting fiscal and political worries across the region. Investors have grown increasingly alarmed over the eurozone’s debt burden, moribund economic growth, and persistent inflation. France is a particular cause for concern: The spread on 10-year French bond yields above German ones — the European benchmark — briefly surged to more than 150 basis points due to concerns about Paris’ huge debt pile and political uncertainty, with far-right and far-left parties ascendant ahead of presidential elections next year.

Previous efforts to corral France’s public finances with spending cuts have, however, been “economically and socially disastrous,” a leading economist wrote in Le Monde, arguing that Paris should prioritize “fiscal responsibility, not austerity.”

The Scene

Wall Street isn’t built for consortiums. Blood feuds flourish, and the pressure to outperform rivals leaves little reason to team up with them on investments. But the sheer size of the AI buildout has competitors playing nice.

“There’s enough to go around for all of us,” Brookfield Asset Management CEO Connor Teskey tells Semafor. Chalk it up to Canadians’ go-along-to-get-along instincts, but the race to shift the cost of the AI buildout — $7 trillion over the next decade, by Brookfield’s estimate — from the hyperscalers themselves to external money managers is making strange bedfellows.

Brookfield has a joint venture with Nvidia to buy up to $100 billion of AI infrastructure assets. It’s also in a consortium arranged by the chipmaker to corral another $500 billion alongside Apollo, Blackstone, and KKR — some of Brookfield’s fiercest rivals.

Data centers, as well as the hardware inside them and the power plants feeding them, are basically the same as bridges, ports, and other unsexy but economically fundamental stuff that firms like Brookfield exist to build, own, and operate — albeit “on a much larger scale and happening much faster,” he said. There will still be plenty of losers among data-center financiers, he said. For power projects, he’s wary of gas, which is slow to deploy, and keener on fuel cells, onshore renewables, batteries, and nuclear.

“If there’s a single narrative that is most starkly divorced from the fundamentals we’re seeing on the ground,” he said, “it’s the idea that the demand for AI infrastructure and the energy and the supply chain that supports it is in some way fragile.”

Q&A

Tim McDonnell and Liz Hoffman: Is power still the most important bottleneck for digital infrastructure?

Connor Teskey: By a very large margin. This imbalance and the capital requirements for energy are going to last through the end of this decade and beyond. But in an environment where all forms of generation are seeing increased demand, we see certain technologies growing the fastest — fuel cells because they’re the fastest to deploy; renewables because they’re the cheapest form of bulk electricity; batteries and energy storage because they provide stability to an increasingly volatile electric grid; and nuclear because it provides your large-scale baseload and energy security.

Which offers the best returns?

Down-the-fairway, mature renewables — onshore wind and solar, battery storage — are absolutely seeing the most growth and have the most market participants. So maybe your return outcomes are more range-bound. Nuclear is a huge opportunity. There is incredible demand, huge capital requirements, and there are far fewer people who have the expertise in order to invest and help pull those projects off of the ground. Therefore, the return requirements are going to be different.

You’re part of the consortium that Nvidia put together. [Nvidia CEO] Jensen Huang has been propping up a huge chunk of the AI buildout. Are we now at a place where investors who do this for a living are stepping in and backfilling that support?

If I can play it back to you in a slightly different way, AI infrastructure is growing on a very traditional trajectory that we’ve seen [before]. Initially it’s done by independent capital providers who look to build and hold the assets. Once the asset class grows, you begin to see banks syndicate the financing. Other capital participants come in, whether it’s private credit or insurance. That is exactly what’s happened within AI infrastructure. The only thing that’s different about this one is it’s happening on a much larger scale and happening much faster.

I’ve never seen competitors at the same table this often. How do you think about places where you want a deal to yourself versus sharing it — and sharing the returns — with your competitors?

We’re seeing one of the biggest energy buildouts in history. We’re seeing global trade rewired with an increasing focus on resiliency and production of critical goods closer to home. These are mega-trends that require far more capital than what has traditionally been available from both governments and even the public markets. So why can you get five or six of the leading players at one table? Because there’s enough to go around for all of us.

But if everyone is in this trade, what’s going to differentiate winners and losers?

While it’s easy to paint everything with a single wide brush, there is going to be a dispersion of who performs well and who has some disappointing results. To be absolutely clear, we’re not doing every opportunity we see. We are doing the tiniest fraction. And even with that very tight filter, we can deploy a tremendous amount of capital.

Returning to the energy supply question, where do you see gas fitting in here? You mentioned lower-carbon technologies, but all the tech companies are scrambling to get their hands on gas turbines.

Gas is going to be critically important. But try and order a new gas turbine today, it’s not coming in a decade that has a ‘two’ on the front of it. That’s why today we see the greatest amount of growth in things like solar and batteries.

When you look at some of the mounting public pushback on data centers, is that a risk to the pace of energy demand growth ahead? Is there a risk of overbuilding?

If there’s a single narrative that is most starkly divorced from the fundamentals we’re seeing on the ground, it’s the idea that the demand for AI infrastructure and the energy and the supply chain that supports it is in some way fragile. Or that there’s a small tweak in model efficiency that’s going to disrupt this supply-demand imbalance we have today. Even if demand , there would still be an imbalance that the current levels of supply are nowhere near servicing.

So will it be this way forever? No. But certainly today being a provider of incremental capacity into this supply chain is very attractive. It’s also important to recognize that what we’re building is under 20- or 25-year contracts with the greatest counterparties in the world. We’re going to get a return on our capital in that initial contract, regardless of what the demand environment looks like two or three decades from now.

Infrastructure projects historically have a public offtaker, like the Port Authority or municipal water departments. Private companies are on the other side of the AI projects. Is AI fundamentally infrastructure, or are we just calling it that?

In the past, economies ran on toll roads and railroads and pipelines that were physical. But as the world around us increasingly digitizes, data is going to need to be increasingly transported, processed, and stored just like every other commodity. So we view this as building the pipelines and the toll roads for a digital era.

The number of young Americans who say they’re “thriving” is near a low point while the share of middle-age adults who say the same is at a nadir, underscoring the level of relative dissatisfaction among these key demographic groups ahead of the midterms.

Only 44% of adults ages 18 to 29 describe themselves as thriving, according to Gallup, 20 points lower than the high measured in 2010. Forty-five percent of adults 30 to 44 say the same; both figures have declined in the years since the COVID-19 pandemic.

These declines appear to be tied to increases in rates of depression, among other factors.

The share of those ages 45 to 64 is also at a low of 46%, on par with the measure during the 2008 financial crisis.

In sharp contrast, those 65 and older are more likely than ever to say they’re thriving, which appears largely driven by satisfaction with their economic situation.

House Democrats are panning the Trump administration after US Trade Representative Jamieson Greer wouldn’t commit last week to imposing Russian sanctions recently enacted by Congress.

Rep. Greg Meeks of New York, the top Democrat on the House Foreign Affairs Committee, called Greer’s comments to Semafor “a completely unsurprising development that only reaffirms what I’ve said all along: There’s no reason to believe [President Donald] Trump or his administration will suddenly hold Russia accountable.”

Rep. Don Beyer of Virginia, the top House Democrat on the Joint Economic Committee, said that “as I and others warned, this legislation provides the president with extremely broad waiver authority to ignore most of the bill’s provisions.”

He pointed to recent reporting that Trump is weighing lifting existing Russian sanctions: “I am not holding my breath to see him take any substantive action targeting Putin’s regime.”

The White House didn’t return a request for comment.

Democrats on the Senate Banking Committee are renewing their calls for Federal Housing Finance Agency Director Bill Pulte to appear before Congress after he sidelined its internal watchdog earlier this month.

“Hearing testimony from Director Pulte is more important than ever in light of his recent decision to shutter the FHFA Office of Inspector General,” the lawmakers wrote in a letter to Senate Banking Chair Tim Scott, R-S.C., shared first with Semafor.

They also highlighted Pulte’s other moves, like appointing himself as chair of Fannie Mae and Freddie Mac; laying off employees; accusing Trump’s political enemies of mortgage fraud; and serving simultaneously as acting director of national intelligence.

The letter provides a useful road map for how Democrats would scrutinize the agency if they win a majority of either chamber this fall. Sen. Catherine Cortez Masto, the Nevada Democrat who led the effort, pushed for passage of a bill last week that would require the FHFA internal watchdog receive whatever funding it requested.

Scott and FHFA did not return requests for comment.

As the Trump administration weighs next steps in the Iran war, at least some in the administration worry that Iran will consider taking action to damage the president ahead of the midterms.

“I think that’s a real possibility that they may want to inflict some pain on the president before the midterms, and so they may do something in the next couple weeks,” one Trump administration official told Semafor. “We’ll see.”

Top administration officials met at Camp David on Friday on the Middle East conflict, which threatens to widen as war breaks out between Yemen’s Saudi-backed government and the Iranian-backed Houthis.

The meeting came as indirect talks between Washington and Tehran have yet to yield meaningful progress. Meanwhile, the US has removed all B-1 bombers from an airbase in the UK used for launching strikes against Iran, following arrests in a suspected terror attack plot.

The News

The winner of Senate control would snatch one of the biggest tangible prizes of the midterms: control over President Donald Trump’s nominees.

If Democrats are in charge, don’t expect many of Trump’s picks to move at all.

“If the nominees are as crappy as his present ones, very few of them are going to get through. If he sends us a new [Defense Secretary Pete] Hegseth, I bet he wouldn’t pass the Senate,” Senate Minority Leader Chuck Schumer told Semafor in a pre-election interview. “It’s the quality of the candidate that matters. Thus far, Trump has a record of notoriously bad candidates.”

Democrats are favored to take the House, which would limit big bipartisan breakthroughs on legislation next year. But if Republicans can hold the Senate, they’d at least retain the ability to confirm Trump nominees — most notably, lifetime judicial appointments.

Schumer’s comments confirm that Democratic control of the Senate under Trump would turn the battle to confirm Senate nominees into trench warfare, with committee chairmen able to bottle up Trump’s picks easily and Schumer able to simply not put them on the floor.

Perhaps a handful of judges would be confirmed, but Cabinet secretaries would face long slogs. There’s also little hope that a Democratic majority would confirm a Supreme Court nominee — should a vacancy arise — after then-Senate Majority Leader Mitch McConnell’s blockade of Merrick Garland during the Obama years.

“A Democrat-controlled Senate will without any question block every single one of President Trump’s nominees. This includes every cabinet member and every judge who is committed to upholding the Constitution,” said Senate Majority Whip John Barrasso, R-Wyo. “[Schumer is] not going to change his playbook of obstruction and opposition.”

Know More

It’s been more than a decade since the president’s party lost control of the Senate during a midterm election. After the 2014 red wave, Senate Republicans gave former President Barack Obama few lower-level judges, blocked a Supreme Court seat from being filled, and even blocked his attorney general nominee, Loretta Lynch, from confirmation until the Senate passed a human trafficking bill.

There’s no way around a judicial nominee blockade, but Trump can lean on acting officials in the executive branch. If Republicans do lose Senate control, look for the GOP to use its blunt confirmation tools — including confirming large tranches of nominees — in November and December to accomplish as much as they can before Schumer takes control again.

There are currently 27 judicial vacancies at the district level and 10 nominees to fill those, mostly in Republican states. There are also a handful of nominees ready to be confirmed to federal appeals courts.

If Republicans hold the chamber, they will probably prioritize judicial appointments for the next two years.

The News

One of the Democratic Party’s most prolific lawyers also is becoming one of its most prolific posters.

Marc Elias has argued dozens of cases around mail-in balloting and election access across the country and in front of the Supreme Court over the last decade. But he has also moonlighted as an election law content creator and advisor for Democracy Docket, a digital media company he founded in 2020 to focus on redistricting, gerrymandering, and voting access.

What began as a hobby to help explain complex redistricting cases more effectively has grown into a serious media operation. Last month, Democracy Docket surpassed 500,000 free email subscribers, the company first told Semafor, including 70,000 subscribers paying $10 a month or $120 per year. The company also has a YouTube channel with more than 800,000 subscribers, a following that has grown significantly in recent months (the account has added half a million subscribers on the platform since January 2025).

“In this era where so many political disputes, so many public controversies really wind up in court, and oftentimes the court arguments frame the public debate — I think lawyers have an obligation to speak directly and plainly in language that everyone, non-lawyers and lawyers alike, can understand,” he said. “That is something I’ve tried to do, particularly in the area of voting and elections, but really more broadly, in the area of democracy.”

Elias told Semafor that he founded the outlet for a fairly prosaic reason: He’d maxed out the number of people he could send emails to on a private email listserv that he’d previously used to send election and redistricting law updates to a few hundred Democratic policymakers, executives, and officials across the country.

The timing turned out to be convenient: COVID-19 lockdowns prompted a wave of court cases around mail-in balloting, an issue which Elias knew well and was, at times, directly involved in. Democracy Docket began posting public legal documents before many news outlets, gaining email subscribers and direct online traffic through Twitter and Facebook.

Elias told Semafor that his readership is a mix of DC insiders, #Resistance liberals who watch Elias’ interviews on MS NOW, and legal and political professionals interested in keeping up with the ins and outs of election laws and voting access issues.

While Elias told Semafor he dedicates just a few days a month to the management side, he acknowledged Democracy Docket has become a profitable enterprise. Asked how much money the company brought in each year, Elias declined to elaborate but said that the vast majority of the company’s revenue came from basic subscriptions, with a small but growing VIP tier of supporters paying $500 a year. Those projections would likely put the company in the ballpark of $9 million to $11 million in annual revenue.

Max’s view

Democracy Docket is part of a wave of new digital news outlets founded in the Trump era that have surged during the Republican president’s second term.

While liberal and left-of-center audiences channeled their interest (and horror) with Trump during his first term by tuning into MSNBC, CNN, The New York Times, and The Washington Post, this go around, shares of those audiences have seemed to abandon traditional outlets for more ideological new media outlets positioned against traditional media.

Outlets like Zeteo, The Bulwark, Crooked Media, and More Perfect Union have added millions of readers, listeners, and YouTube subscribers, even as cable news viewership continues to slide. Some of the movement appears to be ideological: Elias told me that some of the best days of membership for the site have come in the wake of blow-ups at major news outlets like CBS News, which he argues shows viewers were upset with what they saw as media owners’ capitulation to Donald Trump.

But perhaps more interesting, Democracy Docket’s real innovation is in the continued erosion of the wall between real political players and the media that cover them. The proximity between Elias’ legal work and journalistic output is likely a bit too close for those who prefer a more traditional separation of church and state, though Elias insists that he’s fairly hands-off when it comes to the newsroom’s coverage. He said that he has occasionally disagreed with Democracy Docket’s stories and opinions.

“Sometimes you’ll see they report it one way and then I write an opinion piece and I don’t correct them in my opinion piece, I just like say ‘this is what I think about the case, and if you want to know what I think the outcome of the case is, you know, become a premium member,’” he said.

Notable

• Older outlets like the Guardian and The Atlantic have similarly benefited from increased left-of-center interest by explicitly positioning themselves as checks on the current administration — and even on some of their less-aggressive peers.

The Scoop

Atlantic CEO Nicholas Thompson was talking about the media business on Vox’s podcast last month when host Peter Kafka asked him: How was the magazine’s editor-in-chief, Jeffrey Goldberg, feeling about the growing success of Thompson’s personal podcast?

“We make a lot of money on the stuff I do,” he said. “Jeff likes when we make money.”

Thompson’s response ricocheted around The Atlantic’s newsroom. Thompson’s podcast, , has emerged as a source of tension between the magazine’s business and editorial teams. Journalists have complained that the lucrative and high-profile show is not subject to The Atlantic’s editorial rules, input, or oversight — yet a casual listener could easily take it for an Atlantic editorial product.

Thompson’s show is made by the magazine’s business side, and — like any number of contemporary podcasts — features interviews with technologists and business leaders, interspersed with sponsored content. When the podcast launched in 2024, the newsroom raised no objections; The Atlantic has featured a robust paid content arm for years through its creative marketing studio and custom events business.

But as the show’s profile has risen in recent months, the podcast has caused increasing consternation internally. Thompson, despite his commercial role, is a well-known former tech reporter and former editor-in-chief of Wired. Last year, when he published a well-received memoir of his family and time as an elite long-distance runner, The Atlantic ran an excerpt. On , he has booked and interviewed top-tier guests, including OpenAI founder Sam Altman — leading staff to complain that the CEO’s bookings are, intentionally or not, undercutting the newsroom’s own efforts.

According to four people familiar with the situation, the podcast has been a particular source of friction between Thompson and Goldberg. Goldberg, who also has a close relationship with Atlantic owner Laurene Powell Jobs, does not report to the CEO and instead reports directly to the Atlantic’s board of directors. (Goldberg had formally reported to Thompson’s predecessor, Bob Cohn.)

Dissolving Lines

The traditional separation between news outlets’ editorial and business halves has been facing pressure from both sides of that line. Axel Springer CEO Mathias Dopfner’s podcast has drawn world leaders, cultural figures, and executives. Axios CEO Jim VandeHei regularly writes columns and occasionally breaks news on the company’s site, in addition to steering its business. The growth of independent media in the Substack era has also created a generation of journalists who run both the business and editorial arms of their own small media outlets.

In this media environment, Thompson’s sponsored podcast is hardly an outlier. But it’s the latest instance in which Thompson’s attempts to nudge the newsroom on the business side have run up against a more skeptical and traditionalist editorial staff.

Deepening the tension are differing views about the substance of the AI story. Thompson inked a content-licensing deal between The Atlantic and OpenAI in 2024, angering newsroom staffers, some of whom view the frontier AI labs as having stolen journalists’ work for training.

The publication’s editorial union publicly expressed skepticism of the deal and the publication’s policies around AI. The magazine’s tech editor published an op-ed saying publishers like The Atlantic were making a “devil’s bargain.” In an August 2024 letter first reported by Semafor, editorial staff said OpenAI was hallucinating Atlantic stories and linking to aggregation of the publication’s reporting. And while The Atlantic has published largely skeptical coverage of major AI companies and their products’ impact on society, Thompson’s tone, in his podcasts and LinkedIn posts, has been more optimistic.

The View From The Atlantic

The Atlantic declined to comment. But one senior company source stressed that there are clear disclaimers demarcating content made by the business side of the company, even if the content itself can feel journalistic in tone — perhaps unsurprising in the case of , as Thompson is a former journalist.

Max’s view

The Atlantic is one of the clear media success stories of the second Trump term, fueled by Signalgate and other critical reporting and commentary on the Trump administration, a successful events business, and shrewd moves to capitalize on the public stumbles of its DC neighbor, The Washington Post. The 168-year-old magazine’s breakout journalism, its digital success, and a bit of good timing have given both Goldberg and Thompson plenty to brag about on the media podcast circuit.

But strains at the top of the organization over its brand and direction reflect many premium news outlets’ dilemmas about survival and profit in a post-traffic, AI-ascendant media age. Marketers have infinite options for buying ads, meaning publishers no longer have the leverage they did when they controlled much of their own distribution. Meanwhile, independent journalists are developing direct relationships with advertisers and marketers, creating more fluidity between the editorial and business sides of their brands.

Still, the old boundaries existed for a reason. Fragmentation has allowed many powerful figures to get their message across by circumventing traditional media outlets whose questions many CEOs and politicians don’t want to answer. It’s not surprising that Altman was willing to sit down with The Atlantic’s CEO on a sponsored business-side podcast, but not with the magazine’s tech journalists.

Room for Disagreement

Readers and audiences understand that when someone runs or owns a news outlet, they have the right to make it publish their opinions and thoughts, Kafka told Thompson. “It’s not against the law, but it’s also a little creepy.”

The Scoop

A Silicon Valley nonprofit close to the AI safety movement is pledging $10 million by the end of 2027 to fund mainstream and independent coverage of artificial intelligence.

The Tarbell Center for AI Journalism plans to announce that it is launching an institutional grantmaking fund, which executive director Cillian Crosson said will provide grants to newsrooms and other ambitious AI reporting projects.

The first recipient of the grant is , NPR’s new video podcast from former hosts Kevin Roose and Casey Newton, which is receiving a $480,000 grant from the organization. Tarbell is also separately backing NPR’s “Power and Influence” desk, giving the public media outlet $250,000 to help expand its coverage of how AI intersects with politics, money, and power.

“We think that having resources at newsrooms is an important part of ensuring strong coverage,” Crosson told Semafor. The new fund will “increase our support but it also allows us to more easily support a more diverse range of perspectives.”

The organization, which is backed by groups including the deep-pocketed nonprofit Coefficient Giving, said it plans to fund investigative teams, AI verticals at national outlets, and other large-scale initiatives in new and legacy media. In particular, the organization is focused on expanding reporting and on frontier companies and the ways that AI companies and aligned political action groups are influencing American politics and tech regulations.

It’s a significant expansion from the organization’s previous commitments, which have totaled $400,000 over four years. Tarbell’s previous grants focused on backing early-career journalists inside established newsrooms, offering media organizations reporting grants ranging from $1,000 to $20,000 to work on individual stories on AI.

With increased monetary backing, the organization said it planned to issue grants between $50,000 and $500,000, but could make multimillion-dollar grants for the right projects.

Funding and AI safety

In recent years, Tarbell fellows have fanned out across several major news outlets, breaking stories that have often exposed reckless or aggressive actions by AI companies and frontier labs.

Though Tarbell offers funding with no formal strings attached, it has drawn criticism from some in the AI industry and on the political right who see it as fueling what they view as exaggerated safety concerns. The subjects of some of Tarbell’s journalism, including OpenAI, have complained about the reporting and financial support from some organizations aligned with effective altruism, a loose philosophical movement whose concerns include an AI-driven apocalypse.

As Semafor previously reported, cash-strapped news organizations have balanced concerns about optics of outside groups funding journalism with the much-needed financial support and aggressive journalists who have broken legitimate stories about AI and safety concerns. Semafor has not found instances where Tarbell interfered directly in any stories, and the organization is quick to point out that not all of the projects it backs are AI skeptics or strong AI safety proponents.

In a telephone interview last week, Crosson reminded Semafor that the organization has two editorial firewalls: One between itself and its backers, and another between Tarbell and the media organizations it supports. It discloses its donors over $10,000, its fellows maintain complete autonomy over their reporting, and the organization asks news outlets it partners with to disclose when it has provided funding to support a journalist or project.

In an interview with Semafor, Roose noted that Newton had worked with Tarbell at Platformer in recent years, and found the organization to be a strong supporter of independent journalism, and did not interfere or insert itself into any editorial content.

“Their funding has been very useful in helping us get started,” Roose said. “It was a way for us to de-risk going out on our own. We’re feeling quite good about it and we’re grateful.”

Yemen’s Saudi-backed government forces launched a major military campaign Sunday to beat back Iran-aligned Houthi rebels, adding fresh risks to oil markets as Iran reiterated that the Strait of Hormuz remains closed.

Gulf OPEC+ producers continue to pump well below prewar levels, while global inventories have fallen sharply amid export disruptions. OPEC+ agreed Sunday to keep November production targets steady as it seeks to stabilize the market.

Yet even as the flows of crude from the Middle East have increased, oil remains near $100 a barrel.

“A recovery in supply volume does not equal a full normalization of the supply system,” an oil analyst told Bloomberg, as the market continues to price in the reliability of exports.

More than 150 million Brazilians voted Sunday in a pivotal presidential election for Latin America’s largest economy, after a campaign dominated by tensions between Brasília and Washington.

Brazil’s attorney general last week accused the US of undermining Brazilian democracy — a central theme for incumbent President Luiz Inácio Lula da Silva, who holds a razor-thin polling lead over Flávio Bolsonaro.

The right-wing challenger has vowed to join Washington’s “militaristic anti-crime initiatives” across Latin America, Foreign Policy wrote, a central part of the White House’s “Donroe Doctrine” for exerting influence in the Western Hemisphere.

Despite Brazil’s immense resources, its “autonomy to act is at risk,” an expert argued in Foreign Affairs, with “major powers… increasingly able to dictate their terms of engagement with Brazil.”

China closed a record 670 banks last year, or nearly one in four lenders, as Beijing pushes to de-risk amid slowing economic growth.

Nearly all were rural banks, which “remain the weakest part of the system, with poor asset quality, low capitalization, and governance shortcomings,” Fitch wrote.

After a massive credit expansion drove growth, “the financial system’s problems now constrain that growth,” a Rhodium Group expert told ChinaTalk.

The closures were likely geared toward “eliminating the potential for liquidity events among small institutions,” a Singapore-based expert told the Financial Times.

Despite having “wowed the world with its electric cars, dancing robots, and choreographed drones,” China’s economy has undershot projections, partly due to weak consumption, The Economist wrote.

OpenAI faces mounting legal risks stemming from cyber incidents linked to its AI models, after the firm alerted more than 100 organizations to unauthorized activities.

The disclosures come amid increasing criticism of the company’s safety approach: Another OpenAI employee announced his resignation Saturday in The Atlantic, writing that he “decided that the current path is unacceptable,” adding, “The time for trial and error ⁠is over.”

Though some observers regard OpenAI as Anthropic’s “accelerationist” counterpart, company messages reviewed by Semafor suggested that OpenAI employees are concerned about unregulated AI and are beginning to use their leverage: OpenAI’s president pulled the second half of a $50 million commitment to an anti-regulation super PAC after widespread internal criticism.

The US director of national intelligence and the Federal Trade Commission chairman will head up the White House’s “Super Intelligence Force” on AI, President Donald Trump announced Sunday.

The task force — which also includes the vice president, defense secretary, Treasury secretary, and former AI czar David Sacks — will complete a report within 120 days that outlines the risks and opportunities of AI and determines the federal government’s responsibility.

Though DNI Jay Clayton told The Wall Street Journal that he “expect[s] there will be mechanisms developed in dialogue” with companies, the task force will defer to firms on managing risk, according to other officials, and ensure that the US leads: The Treasury secretary reiterated Saturday, “We cannot lose our lead to the Chinese.”

Japan lodged a formal protest with the US and summoned its envoy Sunday after an American soldier was arrested on suspicion of committing what Japan’s prime minister called an “extremely brutal and vicious” murder on Okinawa.

Past violent offenses by US servicemembers have created deep tension between the US and Japan, particularly on Okinawa, where most of the 50,000 US troops in Japan reside.

A rape and murder produced large protests in 2016, as did the rape of a girl in 1995. Saturday’s incident will complicate Tokyo’s cooperation goals, with one Japanese lawmaker saying the US is “failing completely” to train and discipline troops.

Relations are already strained: Japan’s leader stepped onto an empty New York tarmac last month amid a currency dispute.