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Today’s agenda: xAI’s share sale; climate deprioritised under Bailey; Trump on Iran’s uranium enrichment; UK nuclear power; and EU-India trade
Good morning. We start with an exclusive story on Big Four accountancy firms, which are racing to create a type of audit that verifies the effectiveness of artificial intelligence tools as the companies seek to profit from clients’ demand for proof that their AI systems work and are safe.
Auditing AI: Deloitte, EY and PwC told the Financial Times that they were preparing to launch AI assurance services as they hope to use reputations gained in financial audits to win work assessing whether AI systems, such as those in self-driving cars and cancer-detecting programmes, perform as intended.
What’s behind the move: The audits would open another revenue stream for auditors, similar to when the firms cashed in on the trend for companies to buy assurance for their environmental, social and governance metrics. The firms hope demand for the new AI assurance services will be buoyed by the need for greater trust in the technology and companies’ desire for confirmation they are complying with regulations. Ellesheva Kissin has more from London.
Here’s what else we’re keeping tabs on today:
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UK: Bank of England governor Andrew Bailey and other members of the Monetary Policy Committee appear in front of the Treasury select committee in parliament.
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Italy: Prime Minister Giorgia Meloni meets Slovakia’s Prime Minister Robert Fico and, separately, French President Emmanuel Macron in Rome.
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Economic data: The OECD publishes its latest economic outlook. The EU will report its preliminary May inflation estimate and April unemployment data while the US releases labour market statistics.
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Results: Chemring, CrowdStrike, Dollar General, FD Technologies, Ferguson, Hewlett Packard Enterprise and Pennon report earnings.
Five more top stories
1. Elon Musk’s xAI is launching a $300mn share sale that values the group at $113bn, as the world’s richest man returns to his business empire and the race to develop artificial intelligence. The deal will allow new investors to buy into the start-up, which took over social platform X in March. Here are details of the tender offer.
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More tech news: Uber has appointed its first chief operating officer since 2019, as chief executive Dara Khosrowshahi shakes up senior leadership at the ride-hailing company.
2. Exclusive: Senior Bank of England staff members who resigned from climate and nature risk supervision roles have complained the central bank neglected those issues, leaving the UK financial sector underprepared. Six people who left the BoE between 2020 and last year told the FT that climate change had been deprioritised under governor Andrew Bailey.
3. President Donald Trump has said he would insist that Iran completely dismantle its uranium enrichment programme as part of a nuclear deal with the US, appearing to contradict a proposal put forward by his own special envoy Steve Witkoff. The statement is the latest example of the inconsistent messaging that has plagued Washington’s latest talks with Tehran.
4. Exclusive: The Sizewell C nuclear power station is expected to get a final go-ahead during an Anglo-French summit in London next month, as UK ministers edge towards securing billions of investment from the private sector. The Suffolk site is part of a proposed fleet of new nuclear reactors to help boost Britain’s supplies of low-carbon electricity.
5. India and the EU have reached consensus on almost half of the topics to be covered by a trade deal they hope to seal this year. They have agreed that the pact will not cover some “sensitive” farming products such as dairy, according to people with knowledge of the talks. But sticking points remain.
The Big Read
The difference among private capital’s Big Three is becoming stark in terms of their business models. Blackstone is sticking to a traditional fee-based approach, while rivals Apollo and KKR embrace an insurance-powered model that provides long-term funding but comes with banklike risks. So which version of private equity will prevail?
We’re also reading . . .
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‘Problematic links’: A Chinese university co-founded by the University of Liverpool has close ties with entities that are subject to US and EU sanctions, a think-tank has found.
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Vibe coding: Creating apps using large language models may go the same way as DIY, with some people enjoying success while others rue their very costly mistakes, writes Sarah O’Connor.
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Globalisation’s second draft: Capital markets need to be better attuned to individual countries’ goals and the interests of workers, writes Larry Fink, chief executive of BlackRock.
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Private credit: The industry is now so intertwined with big banks and insurers that it could become a “locus of contagion” in the next financial crisis, study finds.
Graphic of the day
As the industry faces falling demand, Oyster Yachts has found a novel way to build orders. The UK maker of luxury “blue water” sailing boats offers its 1,200 owners a mid-life challenge and a collective thrill by helping them to sail around the world together, writes John Gapper.
Take a break from the news
La Tasquería, a new Michelin-starred restaurant in Madrid, is putting an haute cuisine spin on offal in an effort to preserve a Spanish culinary tradition in decline.
