{"id":151729,"date":"2025-11-21T09:59:10","date_gmt":"2025-11-21T09:59:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/151729\/"},"modified":"2025-11-21T09:59:10","modified_gmt":"2025-11-21T09:59:10","slug":"could-washington-pop-the-ai-bubble","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/151729\/","title":{"rendered":"Could Washington pop the AI bubble?"},"content":{"rendered":"

One scoop to start: Birmingham\u2019s NEC events centre is being lined up for a sale<\/a> by its private equity owner Blackstone, which hopes the host of everything from dog show Crufts to this year\u2019s Reform UK party conference will fetch roughly \u00a31bn.<\/p>\n

Welcome to Due Diligence, your briefing on dealmaking, private equity and corporate finance. This article is an on-site version of the newsletter. Premium subscribers can sign up here<\/a> to get the newsletter delivered every Tuesday to Friday. Standard subscribers can upgrade to Premium here<\/a>, or explore<\/a> all FT newsletters. Get in touch with us anytime: Due.Diligence@ft.com<\/a><\/p>\n

In today\u2019s newsletter:<\/p>\n

AI\u2019s fear and loathing in Washington<\/p>\n

Patrick Drahi\u2019s SFR high-wire act<\/p>\n

Abu Dhabi\u2019s deal machine turns over<\/p>\n

Is Maga turning on Trump\u2019s AI optimism?<\/p>\n

Nvidia, increasingly seen as the bellwether for the global financial system, left investors in limbo on Thursday after its strong earnings did not lead to a stock surge.<\/p>\n

Investors have grown edgy over their artificial intelligence bets, which, depending on who one asks, is a massive bubble or the opportunity of a lifetime.<\/p>\n

DD has closely covered the money<\/a> side of the AI boom such as the financial engineering behind data centre projects, the circularity of OpenAI\u2019s deals<\/a> with tech giants and the private capital groups financing<\/a> its infrastructure.<\/p>\n

Today, we\u2019re dipping our toes into politics and looking at Washington, where there are growing signs of an AI backlash that could cool Wall Street\u2019s hottest trade.<\/p>\n

The contradictions of AI politics were on display this week as US President Donald Trump hosted Saudi Arabia\u2019s Crown Prince Mohammed bin Salman and brought tech moguls including Michael Dell, Jensen Huang and Elon Musk to a gala at the White House. During the visit, Trump touted a number of AI deals between the Middle Eastern nation and US tech giants, and approved the sale of chips to the kingdom.<\/p>\n

But is Trump\u2019s AI dealmaking with Riyadh and others a winning political message? Unemployment<\/a> is rising, energy costs in suburban America are surging because of increased demand, and few communities want loud, sprawling boxes of technology in their backyards.<\/p>\n

The FT\u2019s Joe Miller reports in a deep dive that Trump\u2019s unfettered embrace of AI and possible neutralisation of regulatory checks are growing increasingly contentious<\/a> in Washington and within his Republican party.<\/p>\n

Trump appears to be acquiescing to lobbying against AI regulations from Silicon Valley titans such as venture capital firm Andreessen Horowitz. Earlier this week, he backed a plan to restrict states from regulating AI, after a similar measure failed by 99 votes to one in the Senate over the summer.<\/p>\n

\u201cShows what money can do,\u201d Republican senator Josh Hawley said of the move. Hawley is a notorious tech sceptic. But there are more mainstream critics such as Florida governor Ron DeSantis who called the plan \u201can insult to voters\u201d.<\/p>\n

Arkansas governor Sarah Huckabee Sanders, who served as Trump\u2019s White House press secretary in his first term, said: \u201cDrop the pre-emption plan now and protect our kids and communities.\u201d<\/p>\n

Some Republicans in Congress have warned Trump\u2019s embrace of light-touch AI regulation could hurt them electorally, a person close to the party leadership told the FT, amid concerns about job losses, high energy prices and child safety.<\/p>\n

DD expects the AI discourse in Washington will increasingly break unfavourably for the bulls.<\/p>\n

The benefits of the technology largely accrue to the billionaires at the White House this week, but are considered a growing threat inside many swing-state households.<\/p>\n

French telecoms may have another shot at the Drahi empire<\/p>\n

A trio of French telecoms groups are preparing to try again for SFR, the French company owned by billionaire Patrick Drahi\u2019s telecoms empire Altice.<\/p>\n

It comes at a busy time for Drahi and his debt-fuelled group.<\/p>\n

The French police have been carrying out a sweeping probe<\/a> into an alleged scheme by employees and suppliers to defraud Altice. (Drahi has previously denied knowledge of the alleged scheme and said the allegations had come \u201cas a huge shock\u201d.)<\/p>\n

This year, Drahi renegotiated Altice France\u2019s \u20ac24bn debt pile in one of Europe\u2019s biggest such restructurings. He\u2019s been looking to sell assets to pay off some of those loans \u2014 and potentially exit telecoms entirely.<\/p>\n

On top of all that, his auction house Sotheby\u2019s has been haemorrhaging cash<\/a>.<\/p>\n

Now, fresh from seeing their original \u20ac17bn offer rejected last month, French telecoms groups Orange, Bouygues and Iliad are trying again<\/a>.<\/p>\n

The consortium is considering widening the scope of its original bid to include other Altice France assets, in an effort to encourage the French-Israeli tycoon to the negotiating table.<\/p>\n

But there are a lot of hurdles. Any sale will have to contend with competition scrutiny, and some in the consortium believe French regulators may look more favourably on a deal than their counterparts in Brussels would, according to people familiar with their thinking.<\/p>\n

Drahi is simultaneously running processes to sell some assets within Altice France to separate buyers in an effort to give himself options.<\/p>\n

One bid for SFR\u2019s B2B operations has been received, meaning that whatever happens, Drahi will try to play the field.<\/p>\n

XRG\u2019s musical chairs<\/p>\n

When Abu Dhabi\u2019s national oil company Adnoc puts its mind to something, it doesn\u2019t take very long for the group to dominate.<\/p>\n

And over the past year, it has solidified itself as the energy sector\u2019s most ambitious dealmaker through its new vehicle called XRG.<\/p>\n

The fledgling entity \u2014 which was set up to buy international gas, chemicals and low-carbon energy businesses \u2014 has already tried to strike more than $40bn of acquisitions.<\/p>\n

XRG had big ambitions from day one. Adnoc CEO Sultan al-Jaber set the bar high, saying last year that it would be a \u201ctransformative investment company\u201d and constructed a board of big-hitting finance names like Blackstone president Jon Gray and former BP chief Bernard Looney.\u00a0<\/p>\n

But the buying machine is now getting a team in place to take those ambitions even further<\/a>, the FT\u2019s Malcolm Moore and DD\u2019s Ivan Levingston report, with all of the moves resembling something like musical chairs.<\/p>\n

First there\u2019s former Goldman Sachs banker Nameer Siddiqui, who\u2019s joining the group as its next chief investment officer. He was most recently an executive at Phillips 66, defending the US refiner against activist investor Elliott Management.<\/p>\n

Meanwhile Klaus Froehlich, who led the deals team for XRG and Adnoc, will step back from his role at the former. And XRG chief operating officer Khaled Salmeen will leave the company in January.<\/p>\n

All together, the moves add up to serious change after a busy first year of activity.<\/p>\n

The group is not slowing down, targeting a continued run of investment with plans to spend between $10bn and $30bn on infrastructure investment over five years, and its enterprise value has risen to $150bn.\u00a0<\/p>\n

Yet its first year wasn\u2019t all rosy. XRG decided to withdraw a $19bn bid for the Australian oil and gas company Santos, for instance. Now with a new team in place, maybe it\u2019ll make another swing at the group.<\/p>\n

Job moves\u00a0<\/p>\n

Citigroup chief financial officer Mark Mason is stepping down<\/a> from his role, and will become executive vice-chair at the US bank. He will be replaced by Gonzalo Luchetti, who currently heads its US retail division.<\/p>\n

The Takeover Panel, the UK\u2019s mergers regulator, has extended the term of director-general Omar Faruqui until the end of July.\u00a0<\/p>\n

Willkie Farr & Gallagher has elected 30 new partners<\/a>, from offices including New York, London and Los Angeles. The group includes about a dozen lawyers from the corporate and financial services team.<\/p>\n

Smart reads<\/p>\n

Losing interest It\u2019s not just LPs wondering whether their promised PE returns will ever materialise. Private equity employees are quitting some of the industry\u2019s biggest firms, The Wall Street Journal reports<\/a>, as they grow tired of waiting for their \u201ccarry\u201d.\u00a0<\/p>\n

Trump bump The credit the US extended to Argentina ahead of elections last month was a lifeline for Javier Milei \u2014 and a boon for a group of hedge funds, the FT reports<\/a>.\u00a0<\/p>\n

Cantor deals US commerce secretary Howard Lutnick is the country\u2019s dealmaker and bruiser in chief. But he\u2019s promoting data centre projects that are creating huge business for companies run by his sons, The New York Times reports<\/a>.\u00a0<\/p>\n

News round-up<\/p>\n

SEC weighs looser independence rules for Big Four auditors<\/a> (FT)<\/p>\n

Top Fed official warns on risk hedge funds pose to $30tn Treasury market<\/a> (FT)<\/p>\n

Walmart to shift listing to Nasdaq as retailer raises sales forecasts<\/a> (FT)<\/p>\n

US healthcare group Abbott bets on cancer screening technology in $23bn deal<\/a> (FT)<\/p>\n

Paramount makes surprise knockout bid for UK Champions League rights<\/a> (FT)<\/p>\n

Big Four partner promotions sink to five-year low in UK<\/a> (FT)<\/p>\n

US banks shelve $20bn bailout plan for Argentina<\/a> (WSJ)<\/p>\n

Due Diligence is written by Arash Massoudi<\/a>, Ivan Levingston<\/a>, Ortenca Aliaj<\/a>, Alexandra Heal<\/a> and Robert Smith<\/a> in London, James Fontanella-Khan<\/a>, Sujeet Indap<\/a>, Eric Platt<\/a>, Antoine Gara<\/a>, Amelia Pollard<\/a>, Kaye Wiggins<\/a>, Oliver Barnes<\/a>, Tabby Kinder<\/a> and Julia Rock<\/a> in New York, George Hammond<\/a> in San Francisco, and Arjun Neil Alim<\/a> in Hong Kong. Please send feedback to due.diligence@ft.com<\/a><\/p>\n

Recommended newsletters for you<\/p>\n

The AI Shift \u2014 John Burn-Murdoch and Sarah O\u2019Connor dive into how AI is transforming the world of work. Sign up here<\/a><\/p>\n

Unhedged \u2014 Robert Armstrong dissects the most important market trends and discusses how Wall Street\u2019s best minds respond to them. Sign up here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"One scoop to start: Birmingham\u2019s NEC events centre is being lined up for a sale by its private…\n","protected":false},"author":2,"featured_media":151730,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,218,219,61,60,80],"class_list":{"0":"post-151729","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-ie","12":"tag-ireland","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/151729","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=151729"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/151729\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/151730"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=151729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=151729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=151729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}