Category: 3. Business

Hewlett Packard (HP) is seeking $1.7bn (£1.3bn) from the estate of Mike Lynch – who died last year when his yacht sank – over HP’s acquisition of his firm Autonomy, the tech giant’s lawyers have told the High Court.

HP, now known as Hewlett-Packard Enterprise (HPE), bought Mr Lynch’s tech firm Autonomy in 2011, but it says Mr Lynch and Autonomy’s former chief financial officer, Sushovan Hussain, misrepresented the company’s finances.

In a 2019 trial, HPE had accused Mr Lynch of inflating Autonomy’s revenues which it said forced it to announce an $8.8bn write-down of the company’s worth.

Mr Justice Hildyard ruled in 2022 that HPE had “substantially succeeded” in its claim, but that it was likely to receive “substantially less” than the $5bn it sought in damages.

Earlier this year, he ruled that HPE suffered losses amounting to around £700m through the purchase of Autonomy.

Mr Lynch and his teenage daughter Hannah were among seven passengers and crew who died when the Bayesian went down off the coast of Sicily last August during a storm which caused the vessel to capsize and sink.

A hearing in London, which began on Tuesday, will now decide whether Mr Lynch’s estate can appeal against the 2022 and 2025 rulings.

In written submissions, Patrick Goodall, the barrister representing HPE, argued that Mr Lynch’s estate was liable to pay $1.7bn, which includes around $761m in interest.

He said that Mr Lynch had “not only perpetrated an enormous fraud, but lied about it at every stage”.

He said the claimants had spent almost £150m on the legal battle, and were seeking nearly £113m of their costs from Mr Lynch’s estate.

Mr Goodall also said that Mr Lynch’s estate should not be allowed to appeal against either the 2022 or 2025 rulings.

In written submissions, Richard Hill, the lawyer representing Mr Lynch’s estate, said that the $761m in interest sought by the claimants was an “excessive sum… based on a flawed analysis” and that the “legally and economically rational approach would provide for a materially lower figure”.

The claimants’ position that “they were the victors in this litigation” was “overly simplistic”, he added.

Mr Hill also said that Mr Lynch’s estate should be allowed to appeal against the two earlier rulings, claiming that the judge “erred in law” and that there was a “compelling reason for allowing the appeal to be heard”.

A spokesperson for the Lynch family said: “Today’s hearing addresses technical matters that change nothing about the underlying substance of the case.

“The core facts remain that HP’s claim was fundamentally flawed and a wild overstatement.”

In a separate case, Mr Lynch was extradited to the US in 2023 to face criminal charges, and he was cleared of fraud charges in 2024.

He was celebrating being acquitted on his yacht when it sank.

(Bloomberg) — Asian stocks were mainly set for a positive open, even as Wall Street’s selloff deepened amid mounting concerns over lofty valuations in the artificial intelligence sector.

Equity-index futures pointed to gains in Japan and Hong Kong following three days of losses for both benchmarks, and a small decline for Australia. The S&P 500 index fell for a fourth day, the longest losing streak since August. A basket of the Magnificent Seven companies declined 1.8%. Nvidia Corp., at the center of the AI frenzy, slumped 2.8% ahead of its earnings report after Wednesday’s close.

Bitcoin climbed after briefly dropping below $90,000. The yield on 10-year Treasuries slid three basis points to 4.11%. The dollar wavered.

Wall Street has grown increasingly concerned that AI isn’t yet generating enough revenue or profits to justify the massive spending on infrastructure. Microsoft Corp. and Nvidia are committing to invest up to a combined $15 billion in Anthropic PBC, in a move that ties the AI developer closer to two of the biggest backers for its rival OpenAI.

“The question isn’t really whether we’re in a bubble,” said Sonu Varghese at Carson Group. “The real question is how long the current trend in AI spending will last and how bad the fallout will be when it ends.”

The S&P 500 is down more than 3% this month, on pace for its worst November since 2008. Volatility has roared back. Wall Street’s so-called fear gauge, the Cboe Volatility Index, topped 24 — above the key 20 level that causes concern for traders — and reached its highest in a month.

Also high on the list of worries are whether the Federal Reserve will cut interest rates next month. Traders have less conviction about another reduction in borrowing costs, with swaps now implying a less-than-50% likelihood of a December move. Several policymakers have recently cautioned against one, citing the risk of inflation, although Fed Governor Christopher Waller repeated his view in favor of lowering rates.

Treasuries are on course for their first back-to-back gains of the month, edging higher amid the selloff in stocks and fresh signs of weakness in the US labor market.

Jobless claims totaled 232,000 in the week ended Oct. 18, according to the Labor Department website showing historical data for claims. Companies shed 2,500 jobs per week on average in the four weeks ended Nov. 1, according to ADP Research.

The ADP snapshot of the labor market has helped bridge the gap with official employment data delayed by the longest government shutdown in history. While funding to official statistics agencies has been restored, it’s still unclear when October economic data will be issued.

“The stock market has started to doubt the Fed’s ability to cut rates in December, so should Thursday’s jobs report come in weaker than expected, it may clear the path for the Fed to cut in December and fuel the Santa Claus rally we anticipate, which could push the S&P 500 to 7,100 by year-end,” said James Demmert at Main Street Research.

Nvidia Reports

Nvidia, on a standalone basis, has grown larger than the energy, materials, and real-estate sectors combined and depending on the day, it even exceeds the combined weight including the utilities sector, according to Ryan Grabinski at Strategas. It’s also bigger than the entire industrials sector.

“The outcome is likely to send ripple effects through both US and international markets,” Grabinski said. “Although expectations for AI more broadly have cooled in recent weeks, this report has the potential to shift sentiment back to optimism. That said, the bar is undeniably high right now.”

Following Nvidia’s results, traders will then focus on the September US jobs report, scheduled to be released on Thursday after a lengthy delay.

In commodities, oil rose as hawkish rhetoric by the European Union’s top diplomat raised expectations that sanctions on Russia will tighten. Meanwhile, gold wavered.

Some of the main moves in markets:

Stocks

Hang Seng futures rose 0.5% as of 7:32 a.m. Tokyo time S&P/ASX 200 futures fell 0.2% Nikkei 225 futures rose 0.8% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1580 The Japanese yen was little changed at 155.48 per dollar The offshore yuan was little changed at 7.1116 per dollar The Australian dollar was little changed at $0.6506 Cryptocurrencies

Bitcoin rose 0.9% to $93,271.57 Ether rose 0.9% to $3,124.01 Bonds

The yield on 10-year Treasuries declined three basis points to 4.11% Australia’s 10-year yield was little changed at 4.44% This story was produced with the assistance of Bloomberg Automation.

©2025 Bloomberg L.P.

Thank you to Walt and the entire FIA team for inviting me here to speak at FIA EXPO. It is an honor to have set out my agenda as Acting Chairman earlier this year at FIA BOCA, and to now share with you today the incredible progress that the CFTC has made to date, and what’s still to come.  It’s been an honor to usher in a new era of innovation and market structure under my leadership since January, from perpetual-style futures, 24/7 and extended hours trading, prediction markets, and the CFTC’s Crypto Sprint.

When we look back at the inflection points that re-shaped global finance, certain patterns become unmistakable. In the 1970s and 1980s, the electronification of securities markets transformed the very architecture of price discovery, market access, and risk management.  What began as incremental automation evolved into a wholesale rethinking of how markets operate—driving efficiency, transparency, and resilience on a scale that was unimaginable at the outset.

Today, we stand before a parallel moment.  Blockchain technology and the tokenization of financial instruments are not merely new tools; they represent a structural modernization of the market’s underlying infrastructure.  Just as electronic trading shifted us from paper tickets to integrated, data-rich environments, distributed ledgers shift us from siloed recordkeeping to shared, programmable, and verifiable systems of value.

The same core principles that guided prior waves of innovation—market integrity, customer protection, and sound risk governance—must anchor us now.  But we should also recognize that transformational technologies rarely arrive fully formed.  They mature through responsible experimentation, robust public-private collaboration, and clear, forward-looking regulatory frameworks.

If we approach blockchain and tokenization with the same pragmatism, curiosity, and commitment to fairness that guided earlier eras of modernization, we can unlock the efficiencies of digital assets while preserving the trust that underpins our markets.  This is our opportunity to shape the next chapter of financial evolution—one that builds on history rather than repeating it, and one that ensures U.S. markets remain a global benchmark for innovation and integrity.

What a difference a year makes.  Last November, the Digital Asset Markets Subcommittee (DAMS) of the CFTC’s Global Markets Advisory Committee (GMAC), which I sponsor, had just released its first recommendations on tokenization of non-cash collateral.  The report made the case that tokenization is “simply another technological wrapper for existing assets,” and that modern plumbing can remove frictions that hinder collateral mobility and efficiency. 

A year later, as more of the world moves to 24/7 markets in asset classes with sufficient liquidity, those initial findings are more relevant than ever.  Blockchains have proven their utility and durability as constantly upgradable financial market infrastructure, which presents a tremendous opportunity to improve the old ways of managing collateral.

Today, I’ll tell you what the CFTC has accomplished since May 2025, and outline the CFTC’s 12-month Crypto Sprint—listed spot crypto trading, tokenized collateral including stablecoins, and technical amendments to our regulations to enable the use of blockchain technology and market infrastructure.

Continuing to Deliver Results

I want to highlight some of the key accomplishments that the CFTC has achieved since our first 100 days, in addition to our day-to-day work.  I thank my directors and their staff who have been working so hard all year to deliver these results.  Most of these initiatives address proposals or concerns I raised as a Commissioner, and some address longstanding issues created by overreach in the CFTC’s implementation of the Dodd-Frank Act.  I am also very pleased that the CFTC has continued to adopt recommendations from the CFTC’s GMAC. 

Since May 2025, the CFTC has completed the following:

Swaps Market and Reducing Regulatory Burdens

• Issued staff interpretative letter regarding certain cross-border definitions to provide clarity and reaffirm the CFTC’s longstanding application of foreign futures and options and cross-border swaps regulation
• Issued staff procedures to provide clarity on treatment of non-compliance issues and enforcement for non-U.S. swap entities relying on substituted compliance
• Issued proposed rules to amend swap dealer external business conduct and swap documentation requirements
• Issued no-action letter on swap data error correction notification requirements
• Issued no-action letter on SEF order book requirements
• Withdrew proposed rules on parts 37 and 38 of CFTC regulations
• Withdrew proposed rules on operational resilience framework
• Withdrew staff guidance on listing voluntary carbon credit derivatives contracts
• Withdrew staff guidance on derivatives clearing organization (DCO) recovery plans and wind-down plans
• Withdrew staff advisory on prime brokerage arrangements

Innovation and Market Structure

• Issued staff advisory on foreign board of trade (FBOT) registration to provide clarity for non-U.S. exchanges seeking to provide direct access to U.S. participants, regardless of asset class
• Issued staff advisory on market volatility controls
• Issued staff advisory on risk management and compliance requirements for designated contract markets (DCMs), DCOs, futures commission merchants (FCMs), and introducing brokers (IBs), including sports-related event contracts
• Issued staff FAQs on FCM registration and compliance given the number of non-traditional entities and new entrants in our derivatives markets
• Announced implementation of Nasdaq Market Surveillance System to improve the CFTC’s market oversight tools
• Hosted first joint roundtable with SEC in 15 years to discuss innovation, market structure, and harmonization

Golden Age of Crypto

The American story is one of innovation.  From the great transcontinental railroads, to the internet worldwide, American entrepreneurs have held high a shining beacon to the future.  The President’s Working Group on Digital Asset Markets, established by President Trump’s executive order in the first days of the Administration, recognizes our American spirit of innovation and endorses the notion that digital assets and blockchain technologies can revolutionize not just America’s financial system, but systems of ownership and governance economy-wide. 

The President’s Working Group is ushering in the Golden Age of Crypto and published its report, Strengthening American Leadership in Digital Financial Technology, with a comprehensive set of recommendations to provide regulatory clarity and adopt a pro-innovation mindset towards digital assets and blockchain technologies. 

The report addresses key areas such as:

• Positioning America as the leader in digital asset markets

• Modernizing bank regulation for digital assets

• Strengthening the role of the U.S. dollar

• Combating illicit finance in the Digital Age

• Ensuring fairness and predictability in digital asset taxation

For too long, a lack of clarity and destructive regulation-by-enforcement policy has held back U.S. businesses and entrepreneurs whilst the rest of the world established frameworks for digital assets and crypto to facilitate innovation in their jurisdictions.  Indeed, many U.S. innovators were driven offshore to jurisdictions with more regulatory clarity, such as in Asia, Europe, and the Middle East.  That is why the U.S. cannot delay in moving forward to welcome back home Americans and others that want to invest, hire, and build in the United States of America.

Accordingly, with respect to digital asset markets, the President’s Working Group report recommends that the SEC and CFTC use their existing authorities to (1) immediately enable the trading of digital assets at the Federal level by providing clarity to market participants on issues such as registration, custody, trading, and recordkeeping; and (2) allow innovative financial products to reach consumers without bureaucratic delays through the use of tools like safe harbors and regulatory sandboxes. 

The report lauds Congressional efforts such as the historic enactment of the GENIUS Act to establish the first-ever Federal regulatory framework for stablecoins, and the passage by the House of Representatives of the groundbreaking CLARITY Act and other legislative proposals on digital asset market structure, including ongoing progress by the Senate Agriculture Committee and the Senate Banking Committee.  Meanwhile Congress continues this important work, the U.S. market regulators are answering the President’s call to act now with two complementary initiatives to continue the swift progress on providing regulatory clarity: the SEC’s Project Crypto and the CFTC’s Crypto Sprint.  Our goal is clear: for the United States to lead in responsible innovation and safe modernization, and not just talk about it.

Golden Age of Market Innovation

Together, the SEC and the CFTC have embarked on a new beginning for coordination between our agencies.  We will work together to harness our Nation’s unique regulatory structure into a source of strength for market participants, investors, and all Americans.  To the extent possible and appropriate in the public interest under existing statutes, our agencies will consider harmonizing product and venue definitions; streamlining reporting and data standards; aligning capital and margin frameworks; and standing up coordinated innovation exemptions using existing authority.

On September 29, SEC Chairman Paul S. Atkins and I hosted, for the first time in 15 years, a joint SEC-CFTC roundtable to discuss regulatory harmonization that will enable increased market choice and protect investors through clear, predictable, and pro-innovation regulatory frameworks that addresses, among other topics, innovation exemptions and DeFi.

I’ll say it again: the turf war is over.  We are getting back to basics and back to regular order.

CFTC Crypto Sprint

In August, I announced the CFTC’s 12-month Crypto Sprint to implement the President’s Working Group recommendations.  I have long advocated that simplicity is the solution, and that the U.S. must have a durable and flexible approach to regulation that will keep up with continuing innovation and stand the test of time.  I have cautioned that we must take to heart the lessons learned from the Dodd-Frank Act, which had unintended consequences such as creating regulatory moats and market fragmentation.

This means relying upon technology-neutral regulations that do not have to be continually rewritten to keep up with innovation, and activity-based regulations that do not require burdensome and costly entity-registration requirements that stifle competition by raising the gate to new entrants with less capital like start-ups and entrepreneurs. 

Right after the release of the President’s Working Group report, the SEC and CFTC outlined our near-term initiatives.  As part of our Crypto Sprint, the CFTC launched public consultations on listed spot crypto trading and all other President’s Working Group report recommendations. 

The CFTC’s Crypto Sprint has three main components: (1) listed spot crypto trading, which will be live on a DCM by the end of the year; (2) enabling tokenized collateral, including stablecoins, in derivatives markets, with guidance expected by the end of the year and DCOs going live by Q1 or Q2 of next year; and (3) a rulemaking to make technical amendments to the CFTC’s regulations for collateral, margin, clearing, settlement, reporting, and recordkeeping to enable the use of blockchain technology and market infrastructure including tokenization in our markets.  The rulemaking is expected to begin next year and be completed by August 2026. 

That will complete the CFTC’s 12-month Crypto Sprint to implement the President’s Working Group report recommendations.

Listed Spot Crypto Trading

The SEC and CFTC released a joint staff statement in September that current U.S. law does not prohibit SEC- or CFTC-registered exchanges from facilitating trading of certain spot crypto asset products.  In other words, we are bringing digital assets and crypto inside our existing regulatory perimeter for securities and futures exchanges, which has provided unmatched access, market integrity, and investor protection for nearly 100 years. 

U.S. capital markets are the deepest and most liquid in the world, and we will use that strength now.

Listed spot crypto trading on DCMs is permissible under the Commodity Exchange Act, pursuant to amendments made by the Dodd-Frank Act, for retail commodity transactions involving leverage, margin, or financing.  One type of trade workflow could resemble cash equities, where an FCM provides leverage similar to a prime broker, the DCM is the execution venue, and the DCO performs post-trade processing.  This framework may be especially appealing to institutional liquidity providers and other market participants, because it utilizes existing regulations and processes for futures and options trading; will simplify implementation of operational, risk management, and compliance requirements; and will have best-in-class customer protections and market integrity.

Cross-Border Framework

Throughout my term and my sponsorship of the CFTC’s GMAC, I have been a staunch advocate for access to markets. Drawing upon the lessons learned from Dodd-Frank, it has been a priority for me to ensure that there is a pragmatic cross-border framework, including substituted compliance, mutual recognition, and passporting as appropriate, in order to avoid market fragmentation.  That is why I believe that, in the near term, we should use our existing registration categories for brokers, dealers, exchanges, and other market participants because the CFTC’s cross-border approach to foreign markets, products, and intermediaries has been in place for decades. 

We should not have to reinvent the wheel.

Two months ago, the CFTC released an advisory to reaffirm our longstanding framework for the registration and recognition of non-U.S. exchanges or FBOTs, which dates back to the 1990s.  By using this framework to provide regulatory clarity for non-U.S. exchanges, whether traditional or digital asset markets, that are in jurisdictions with comparable regulatory regimes to the U.S., this is the fastest way that we can legally onshore trading activity efficiently and safely under CFTC regulations and open up U.S. markets to the rest of the world. 

Because of the lack of U.S. regulatory clarity and the enforcement-first approach of the past several years, many U.S. firms established affiliates in non-U.S. jurisdictions with clear regulations for crypto asset activities.  For example, these U.S. firms may have an EU crypto derivatives trading venue that is authorized under the Markets in Financial Instruments Directive (MiFID) regime as a regulated market (RM) or multilateral trading facility (MTF).  These EU trading venues could seek to provide access to U.S. market participants under the CFTC’s regulatory frameworks for FBOTs or exempt swap execution facilities (SEFs), as appropriate. 

The CFTC will also explore whether trading platforms authorized under the EU Markets in Crypto-Assets Regulation (MiCA), or similar virtual asset or crypto asset regimes, would also qualify under the CFTC’s current cross-border frameworks.  Because so many foreign jurisdictions, in the vacuum over the past several years of a coherent U.S. digital asset policy, have implemented regulatory regimes that are not technology neutral, but are instead specific to crypto and blockchain technology, I believe it is critical for the U.S. to evaluate the most pragmatic path forward, particularly because those non-U.S. crypto asset regimes already include pillars such as capital, risk management, market conduct, retail protection, custody, conflicts of interest, transparency, and illicit finance.

Tokenized Collateral Including Stablecoins

In September, the CFTC launched an initiative for the use of tokenized collateral including stablecoins in derivatives markets, with a public comment period that ends this month.  This initiative builds on the CFTC’s successful Crypto CEO Forum held in February 2025 and puts into practice the recommendations from the GMAC’s DAMS and the President’s Working Group report, directing the CFTC to provide guidance on the adoption of tokenized cash and non-cash collateral as regulatory margin.

At our historic Crypto CEO Forum, we discussed how innovation and blockchain technology will drive progress in derivatives markets, especially for modernization of collateral management and greater capital efficiency.  These market improvements will unleash U.S. economic growth because market participants can put their dollars to work smarter and go further.

The public has spoken: tokenized markets are here, and they are the future.  For years I have said that collateral management is the “killer app” for stablecoins in markets.  The CFTC continues to move full speed ahead at the cutting edge of responsible innovation, and I appreciate the support of our industry partners.

Our markets are global and increasingly 24/7, but bank rails are not.  That mismatch creates avoidable settlement risk and unnecessary drag on capital.  The GMAC’s work last year documented the operational bottlenecks of today’s non-cash collateral—sequential intermediaries, limits on secondary transfers, lack of 24/7/365 capabilities—and points to blockchain as a means to deliver real-time collateral mobility without changing the character of the asset itself.

Now, the CFTC is taking a concrete step toward enabling real-time collateral mobility, improving capital efficiency, and hard-wiring resiliency into U.S. clearing and settlement infrastructure.  By working side-by-side with market participants, clearinghouses, and prudential regulators, the CFTC is helping operationalize what we’ve been talking about for years: moving from pilots and proofs-of-concept to the supervised use of tokenized collateral within our existing regulatory framework.  Important issues like convertibility, liquidity, transparency, custody safeguards, and haircuts should be addressed, so everyone knows the rules of the road.

Tokenized money market funds 

The CFTC sees tokenized money market funds, or TMMFs, as a fast-follower use case building directly on the same risk framework.

Money market funds already play a central role in derivatives margin today.  The GMAC’s prior margin-rule recommendations paved the way by calling on the CFTC to remove outdated restrictions on MMFs engaged in repo and securities lending.

Tokenization simply modernizes how those MMFs are recorded and transferred.  It turns daily NAV shares into onchain instruments that can move 24/7 between eligible custodians and clearing members.

Here’s how this could work:

• Eligible assets: TMMFs would remain regulated under Rule 2a-7 and maintain all existing liquidity, maturity, and credit-quality standards.
• Custody and control: DCOs and FCMs would hold perfected control over the tokenized share—not the underlying portfolio—consistent with how we treat tokenized cash under GENIUS.
• Haircuts and valuation: TMMF tokens would be haircut using the same risk-based approach already applied to MMFs under Part 39, adjusted for any settlement-time differences.
• Liquidity resource qualification: Because TMMFs settle in U.S. dollars and are redeemable on demand through regulated intermediaries, DCOs may count them as qualifying liquidity resources under § 39.33(c)(3).
• Interoperability: With both payment stablecoins and TMMFs tokenized to common standards, clearing members could seamlessly move collateral between cash-like and yield-bearing positions, improving resiliency, and capital efficiency.

As I’ve said before: embracing new technology does not mean compromising on market integrity—it means using technology to achieve the same protections faster, cheaper, and better.

Qualified payment stablecoins

Congress has now drawn bright lines: payment stablecoins that meet strict prudential standards—dollar-denominated, non-yield-bearing, 1:1 redeemable, backed by high-quality liquid reserves, and issued by appropriately supervised U.S. entities—are money-like instruments. That is exactly the class of tokens we’re talking about as collateral and settlement assets.

Important questions will need to be addressed regarding whether our rules should treat these qualified payment stablecoins as cash or cash equivalents, as commenters highlight their stable value, high liquidity, and ready convertibility.  For VM, that means considering whether haircuts are appropriate.  For IM, I believe that an interim “look-through” approach tied to disclosed reserve assets is a practical bridge while the market scales.  In times of market stress, it may be necessary to consider whether a Fed facility for stablecoins is appropriate to address liquidity and other concerns.

Specifically, the GENIUS Act implicates CFTC regulations in certain key areas. Section 3(g) states that payment stablecoins that are not issued by a permitted issuer cannot be used as cash or as cash equivalent margin or collateral for FCMs, DCOs, or swap dealers. Section 10 states that CFTC registrants (such as FCMs and swap dealers) can provide custodial or safekeeping services with respect to payment stablecoins, including that Section 10(b) requirements can be superseded by similar CFTC requirements.  The CFTC welcomes public comments on these GENIUS Act provisions as part of the CFTC’s Crypto Sprint.

Part 39 and DCO initiatives

Some DCOs have announced initiatives to use stablecoins as collateral.  In order to advance regulatory clarity and implement the GENIUS Act, I encourage DCOs and their clearing members to consider, under existing Part 39, whether qualified payment stablecoins are:

• Eligible margin and settlement assets
• Acceptable as initial margin
• Qualifying liquidity resources and
• Unencumbered liquid financial assets

Equally important, I want to acknowledge questions about perfected security interest.  To comply with Part 39, a perfected security interest with respect to stablecoins should be addressed.  I believe that seeking a lien over the issuer’s underlying reserve assets may conflict with the purposes of the GENIUS Act, which treats the payment stablecoin itself as the settlement asset.

Further, I believe that we should avoid double-counting of liquidity resources, which is consistent with the Principles for Financial Market Infrastructures (PFMI) on settlement assets.  Once the CFTC issues its tokenized collateral guidance, bodies such as the Committee on Payments and Market Infrastructure and the International Organization of Securities Commissions (CPMI-IOSCO) may want to consider whether international standard setting is appropriate to prevent market fragmentation, mitigate systemic risk, and ensure financial stability.

Other steps

In addition, the CFTC will consider whether relief is appropriate to:

1. Add qualified payment stablecoins to the eligible collateral list for swap entities
2. Recognize qualified payment stablecoins for certain purposes for VM, and
3. Permit DCOs and FCMs to invest customer funds in them, with appropriate limits on concentration, custody, and convertibility.

Conclusion

As we chart this next stage of market modernization, we should remember that every major advance in finance has been propelled by a simple belief: that with integrity, collaboration, and discipline, we can build systems that serve people better than the ones that came before.  The electronification of past decades did not diminish our markets—it elevated them, expanding opportunity while strengthening resilience.  Blockchain and tokenization offer us a similar horizon today.  If we meet this moment with the same professionalism and commitment to the public interest, we can shape a future where our markets are not only efficient with more access, but also more transparent, more competitive, and more innovative.  That’s the job, and that’s what we will achieve together.

Thank you.

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Chancellor Rachel Reeves has asked the UK competition watchdog to investigate the cost of private dental treatment amid mounting concern about a sharp increase in prices.

Reeves has written to the Competition and Markets Authority requesting a market study into “private dentistry costs and practices”, saying that patients may be paying more than is necessary.

Prices for private dental treatment have climbed sharply in recent years, according to research by myTribe Insurance, a website providing information about private healthcare and insurance.

The research, published in December last year, found that patients were paying up to 32 per cent more for private dental procedures in 2024 compared with 2022.

An analysis of data over this period by myTribe from 450 private dental practices found the average cost of a white filling had increased 23 per cent to £129 last year, while the average cost of a tooth extraction had risen 32 per cent to £139.

Reeves said: “The scourge of hidden costs, lack of transparency and overtreatment has blighted families in need of dental treatment for too long.

“That’s why I want to see urgent action taken to help reduce prices, whilst the cost of living still puts pressure on families across the country.” 

A spokesperson for the CMA said they “welcome the request from the chancellor to carry out a study into the private dental care market”.

“This is an important market that needs to work well for consumers,” they added. “We have been exploring the merits of work in this area and will be developing a specific proposal to put to our board.”

Reeves’ request to the CMA to investigate private dentistry costs and practices comes after ministers in January forced out the regulator’s then chair, Marcus Bokkerink, because of concerns that the watchdog was not sufficiently focused on growth.

But the government’s deregulatory agenda and attempts to nurture growth have had to be accommodated alongside its efforts to address Britons’ concerns about the cost of living.

The dental sector has said the government’s increase in employer national insurance contributions in last year’s Budget has pushed up costs for practices and played a role in the increase in prices for private treatment.

A shortage of dentists, combined with strong demand for their services, has enabled practices to push up their charges for private procedures, according to one trade body.

Neil Carmichael, executive chair of the Association of Dental Groups, said: “Without a significant increase in new dentists, consequential inflationary pressures are bound to be felt across the sector.

“Many ADG members have already found recent increases in national insurance and costs for essential supplies to be difficult to absorb.”

Dentists have also flagged major problems with the NHS dental contract, which has contributed to long waiting times for treatment on the health service.

Under the NHS contract, practices are paid set fees to deliver a certain number of “units of dental activity”, or treatments, each year.

Dentists have complained that the system has left them struggling to cover their costs, with simple procedures sometimes remunerated at the same rate as complex treatment, such as root canal surgery. 

The sector has said the system has contributed to the increase in private dental prices, as some practices seek to cover the costs of doing NHS work. 

This is an audio transcript of the Unhedged podcast episode: ‘Big deals in Big Pharma’

[MUSIC PLAYING]

Robert Armstrong
There has been a wild and hectic series of M&A deals in the pharmaceuticals industry. We are now headed for a record year for pharma M&A, in fact. But sometimes, mergers are a sign of strength for an industry and sometimes they are a sign of weakness. Today on the show, drugs, politics and deal making.

This is Unhedged, the markets and finance podcast from the Financial Times and Pushkin. I am Rob Armstrong, US finance commentator at the Financial Times, coming to you from a chilly and wintry New York City and joined in person by James Fontanella-Khan, our US finance editor.

James as an Italian, how are you bearing up under all this chilly weather?

James Fontanella-Khan
I’m freezing. I’m not liking it at all, but hello everyone.

Robert Armstrong
OK. Cold, warm or in between? What is going on with the US pharma industry?

James Fontanella-Khan
Well, the pharma industry on the M&A side of things is bloody hot right now. (Robert laughs) I’ll tell you that. We’ve seen a crazy wave of deals. We’re on track for a record year and a lot is happening. I didn’t put a lot of faith last time I was on the show about this deal boom being sustained.

Robert Armstrong
You were short the deal boom and it’s keeping on booming.

James Fontanella-Khan
Is there a video here, no? Otherwise, I’d be eating my hat. (Robert laughs)

Robert Armstrong
Oliver Barnes was on too and he was long the deal boom. And he looks right and you look wrong for now.

James Fontanella-Khan
That’s why he’s been breaking all these stories because it’s like he’s trying to make it happen. He’s been on fire so why are we having so many deals, particularly in the pharmaceutical industry? Well, it’s the same old story, like Big Pharma has to hunt for new assets because these days a lot of these big guys don’t do the same amount of R&D that they used to. So that has been outsourced to a bunch of VCs backing the next . . . 

Robert Armstrong
The smaller companies.

James Fontanella-Khan
Exactly. And . . . 

Robert Armstrong
So it’s a patent thing, as always.

James Fontanella-Khan
It’s a patent thing.

Robert Armstrong
The old drugs go off patent and they have to be replaced. And you used to replace them in-house, but now you have to hunt them down and kill them.

James Fontanella-Khan
Exactly. So you’ve got a lot of guys running out of their top drugs, which are protected before they become generics. And so yes, this being in frenzy. What is phenomenal is there’s a lot of these assets out there, maybe they’re approaching, you know, the last stage of clinical trials.

And maybe, there’s one or two players looking at an asset but here we have often like four, five, six Big Pharma companies going after the same asset and you see premiums of like 300 per cent Yeah.

Robert Armstrong
Cidara was an amazing story. Walk us through that one.

James Fontanella-Khan
I mean, so Oli calls me a couple of days before the deal got announced.

Robert Armstrong
Oliver Barnes.

James Fontanella-Khan
Yeah, Oliver Barnes, our M&A reporter, and he had a tip and we started chasing it and like we’re trying to confirm and like and as he goes, he is like, oh, the asset is worth about $3bn. So, you know, go for the usual premium of maybe no, 40, 50 per cent for these assets. So maybe it’ll go up to $4bn or $5bn.

And suddenly, he’s hearing it’s a three-way horse race. And he said, JFK, I think it’s like going for $9bn. And I say, you must go. Your sources are a little weak, like can . . . just go back to your guy. And I say, no, honestly, it’s like, it’s $9bn. And we waited, we got all the confirmations that we needed, we put out the story and surely next day, the Cidara deal is confirmed. Merck bought it and yeah, it was like astonishing.

Few days later, similar thing with another company called Halda. So Cidara is kind of as a flu vaccine, Halda, instead it has a kind of a cancer drug. And again, went for $3bn, is a private company. Nobody had really heard much about it and J&J beat a bunch of other big guys out there. And then, the mother of all crazy deals was the sale of Metsera.

Robert Armstrong
Yeah. I want to get to Metsera in a second. But first, let me give you some context. The pharma industry in particular and I should say the healthcare sector generally, has been underperforming the market pretty hard over the last five or 10 years.

I mean, when I first started working in finance, pharma was kind of where tech is now. You know, this is 20 years ago or whatever and it was like these companies were huge and they grew fast and they did a lot of deals and so forth. But they were like top of the world and now they’re kind of low growth and a bit beat up.

And so I think we have to acknowledge that in the background that this is an industry that’s kind of looking for its soul while tech is everything and pharma is kind of languishing in some way.

James Fontanella-Khan
Well, you started the show saying, is it a sign of strength or a sign of weakness?

Robert Armstrong
Yes.

James Fontanella-Khan
And I think, in most cases it is a sign of weakness. In the sense that you’re running out of options and you got to restock. You gotta find . . . and a lot of these deals we can get into it, especially with the Metsera situation, they’re defensive. You’re trying to like get hold of a drug to essentially snatched away from one of your rivals.

Robert Armstrong
Now let’s turn to Metsera. What makes this deal particularly interesting, of course, is that it’s in the hottest area of pharma, which is of course, weight loss.

James Fontanella-Khan
Indeed.

Robert Armstrong
How is its GLP-1 drug different from the others?

James Fontanella-Khan
So the thing that makes Metsera different from the others is the fact that it can, with one dosage over a month, instead of every week, it can give you the same kind of results that an Ozempic gives you right now. Allegedly. I mean, there’s still . . . 

Robert Armstrong
Yeah, you know, a lot of game to play.

James Fontanella-Khan
Exactly.

Robert Armstrong
Clinically.

James Fontanella-Khan
But fundamentally, this is the big innovation among others. And then the various ways that you can consume it.

Robert Armstrong
OK. Bidding war.

James Fontanella-Khan
Well, we know in the world is the kind of, the original, the OG of weight-loss drugs is Novo . . . 

Robert Armstrong
Novo Nordisk.

James Fontanella-Khan
Nordisk, which essentially this, the Danish company that kind of discovered . . . 

Robert Armstrong
Opened the market.

James Fontanella-Khan
Yeah. Well, they discovered their diabetes drug was actually the magic drugs. The thing everybody loves is like to look lean and mean and it exploded.

Robert Armstrong
So that was Ozempic and then Wegovy were their drugs.

James Fontanella-Khan
Exactly. And then Lilly, Eli Lilly came up with a rival drug. And it’s been amazing.

Robert Armstrong
Zepbound.

James Fontanella-Khan
Exactly. And like, and Eli Lilly has literally exploded. So now it’s way bigger the Novo.

Robert Armstrong
And interestingly, Novo, which just two years ago, was the biggest stock in Europe and was the stock on everyone’s lips and everybody was overweight.

This stock, since I’m looking at stock . . . 

James Fontanella-Khan
No pun intended.

Robert Armstrong
 . . . stock chart here. (Laughter) Since the middle of 2024, that stock has fallen by two-thirds.

James Fontanella-Khan
Correct.

Robert Armstrong
And if I can just put a total tangent into our conversation. You know what I think about when I look at Novo’s chart? Nvidia. Because, you know, everybody was like, Novo is the only company that can do this thing, this weight-loss drug, which is revolutionising everything.

Nobody ever will ever catch up. La, la, la, la, la, la. And now, it’s down two-thirds. It just rhymes to me with how everybody talks about, no one will ever catch up with Nvidia in GPUs. I’m just throwing that out there as chum. Now, back to our regularly scheduled programme.

James Fontanella-Khan
Love it. But a little short from Rob Armstrong on the side.

Robert Armstrong
OK. But so now we have Lily, which is killing it in weight-loss drugs.

James Fontanella-Khan
Absolutely.

Robert Armstrong
(Overlapping speech) Novo, which is struggling.

James Fontanella-Khan
Correct.

Robert Armstrong
And everybody else in the industry kind of looking along from the sidelines, like, how can I get a piece of this action?

James Fontanella-Khan
A hundred per cent right.

Robert Armstrong
Here’s this biotech that has a technology.

James Fontanella-Khan
So let’s do a little TikTok. We love the TikToks.

Robert Armstrong
That is a journalistic term for our listeners at home.

James Fontanella-Khan
Thank you for saying that story.

Robert Armstrong
For a story that lays out in sequential order, how a deal went down.

James Fontanella-Khan
So in September, Pfizer, strikes deal with Metsera, another scoop brought to you by Oli Barnes. So that deal is really Pfizer’s opportunity to make inroads in the weight loss category.

Robert Armstrong
Yes.

James Fontanella-Khan
All is good. They pay about $7bn, a bit of money upfront and a little later. All seems good, we’re in September. We knew that there were a lot of companies looking at this. Usually after a deal happens, you get a proxy filing where you can see all the kind of companies, A, B, C, D.

There were a lot of companies kind of fighting for Metsera. It’s done. Everybody goes back to their normal life. And then late in October, out of the blue, Novo makes a comeback. And essentially, Novo made an offer, which was higher than the one that Pfizer made. And the board of Metsera said that after reviewing Novo’s bid, they thought it was superior to Pfizer’s bid. Now, interestingly, back in that . . . 

Robert Armstrong
We’re in October now.

James Fontanella-Khan
Exactly. In that . . . 

Robert Armstrong
I’m looking at the stock price of Metsera, which you can look up at home, and it’s like a staircase going up, you know what I mean?

James Fontanella-Khan
It’s a staircase to heaven.

Robert Armstrong
Yeah, exactly. (Laughter)

James Fontanella-Khan
For its VC backers. But interestingly, Metsera’s advisers said to Metsera that they should go with Pfizer back in September, despite the fact that at the time Novo had already made a bid which was higher in dollar values to Pfizer’s.

The reason they went with Pfizer then for a lower price was because they deemed Pfizer’s bid safer from an antitrust perspective, ie, that means when you need to get regulatory approval, they were concerned that the FTC, which would be . . . 

Robert Armstrong
Yes.

James Fontanella-Khan
. . . the agency looking into this would’ve determined that like, well, Novo already has Ozempic.

Robert Armstrong
They’re gonna corner the market in some way. It’s too much market power.

James Fontanella-Khan
It’s a bit anti-competitive, and we already know that Trump is unhappy with the very high price of . . . 

Robert Armstrong
OK, now I’m gonna stop you right there, because as a paranoid person. I have to ask, in your opinion, and of course we can only speculate here, but let’s speculate together. Did the mere fact that Pfizer was an American company play in that calculation, or was it really just about the portfolios of the two companies and the competitive concerns? In other words, Trump being president, does that tip the scales towards the American bidder?

James Fontanella-Khan
I’ll bring you the facts that I am aware of and then we can use them to kind of answer that question. The immediate reaction from the Pfizer side, when Novo kind of gate crashed the deal in October. So in September, Pfizer had an agreed deal with Metsera. In October, Novo gate crashes the deal with a higher bid.

So the reaction of Pfizer immediately is, this is a European company going after an American asset at a time when it already has a drug. We wanna bring down the cost of this drug for Americans. In all of their communication, the word America, America, America first was very prevalent. It was very clear that they were leaning on the fact that like regulators had to support this deal because it was an American deal and they had to oppose the European evil company.

Robert Armstrong
Now here’s some words from Mike Doustdar. Am I saying that correct? That’s the new CEO of Novo Nordisk who got the job after the last guy got sacked because . . . 

James Fontanella-Khan
Correct.

Robert Armstrong
Share prices falling through the floor. This is him talking to the FT. It became evident that Pfizer won this at a lower bidding price than we place forward. That’s when I got very upset. I felt not in America where there is free market advocacy, shareholder value creation, and there’s just something unfair. So, you know, he’s putting some aspersions on the process there.

James Fontanella-Khan
100 per cent

Robert Armstrong
I would say.

James Fontanella-Khan
And it’s important to, again, to bear in mind that Albert Bourla, the CEO of Pfizer, soon after Trump won the election, made it a priority to spend time with the President and to get close to the president. He spent a lot of time in Mar-a-Lago.

Robert Armstrong
Yes.

James Fontanella-Khan
He cut a deal with Trump on kinda the cost of some drugs.

Robert Armstrong
Yes.

James Fontanella-Khan
And so this was his chance, like, see if that investment . . . 

Robert Armstrong
Yeah. Yeah. Come back to him. So did we get to the end with Metsera? Did we get it sold at the final price? Did we finish the TikTok there?

James Fontanella-Khan
No, we’re, we’re not done.

Robert Armstrong
OK. Keep going, keep going.

James Fontanella-Khan
So I’ve been covering this for over a decade. I cannot remember anything so insane. The back-stabbing, the press releases accusing the others of like committing, because they started suing the crap out of each other. It was like hilarious.

Robert Armstrong
I didn’t know there was lawsuits.

James Fontanella-Khan
No, no, that’s like. It’s like, because essentially Pfizer was trying to get Delaware to throw out Novo’s bid arguing that we have an agreed bid. They cannot just kind of gate crash. And Delaware said, we are here to represent essentially shareholder interest. And if somebody comes with a higher bid, you gotta let the bidding war go on. The show must go on.

Robert Armstrong
Yes, hurrah for that. Hurrah for that. Good for Delaware. Good for the great state to Delaware.

James Fontanella-Khan
And so, Delaware really did a solid to the Metsera shareholders. At some point, there’s a letter from the FTC that manages to make its way into the press. And essentially the FTC says, there’s no way Novo can get this deal done without going through us, point number one. And point number two, this deal if it goes with Novo, looks somewhat anti-competitive. So at this point, no, the FTC can make a final judgment, but it’s just like putting some vibes out there.

Robert Armstrong
Yeah, pretty strong vibes. I would say.

James Fontanella-Khan
Again, very unusual for that kind of letter to leak out to the press, but a few hours later, maybe, I think the day after, there was a final kind of rally of like bids and essentially, Novo had put the highest bid of just, I think $83, a little higher than 80. Pfizer matches the Novo bid. And essentially. Yeah, the Metsera guys decided we’ve been greedy enough. We went from $7bn to $10bn. We made $3bn in a couple of days.

Robert Armstrong
We’ll hit the Pfizer bid, which is the safer one.

James Fontanella-Khan
Exactly, yeah. And they mentioned that, you know, following the letter from the FTC, we’ve determined that we should go with Pfizer.

Robert Armstrong
OK, so earlier this month we had the president coming out with a big announcement. He has this thing called, is it TrumpRx?

James Fontanella-Khan
Correct.

Robert Armstrong
Which is this program through which people can buy drugs at discounted rates. He had a great big announcement, which you can look up on the internet, about how he’s going to make obesity drugs radically cheaper.

Clearly, he has zeroed in and the administration has zeroed in on drug prices. As something the American people are sensitive to, and if you’re sitting there in the corner office at one of these big drug companies, this has gotta make you sweat a little bit. And I wonder if this wave of deals is a way to say, we’re under pressure. We need to get bigger and stronger. Does that story of the case make sense to you? JFK?

James Fontanella-Khan
A hundred per cent. I mean, there’s no doubt that like, every CEO of a big pharma company is under pressure right now on pricing. And, you know, pricing has been an issue for every administration. Let’s not forget like Obama, Biden. Nobody likes crazy prices for crazy drugs.

Robert Armstrong
No.

James Fontanella-Khan
Trump has been effective at scaring the living hell out of a lot of these people. They’re all bending the knee.

Robert Armstrong
Yeah, yeah. No, it’s true.

James Fontanella-Khan
And the pharma guys have done the same. I mean, you made the point that, you know, there’s a broader distribution of these drugs, so it kind of makes up for the discount.

Robert Armstrong
Yeah.

James Fontanella-Khan
But that’s fine. That like, that’s a win for Trump, essentially. And so that pressure is gonna keep being at them

Robert Armstrong
Final question before we go to the break and then to Long/Short. The last time we had a major wave of big pharma to big pharma mergers, major companies buying each other was year of our Lord 2009 when we had Roche and Genentech, Pfizer and Wyeth, Merck and Schering-Plough. These were enormous deals.

James Fontanella-Khan
I wasn’t even covering deals then.

Robert Armstrong
I know it was a long time ago.

James Fontanella-Khan
Give me a big pharma to big pharma deal, please.

Robert Armstrong
And we haven’t seen that yet. Are the conditions in place for a wave of not big to small consolidation, but big to big?

James Fontanella-Khan
Yes. The conditions have never been better. And it goes back to the point you were making earlier about these executives being under pressure by the current executive to lower drug prices.

Robert Armstrong
And under pressure from the market because their share prices are not in great shape.

James Fontanella-Khan
And so going back to the original question, is it a good sign, a bad sign, defensive or offensive?

I think if they can make an argument to the administration that by allowing big pharma to big pharma M&A. So bringing together two giants will lower the price of drugs. Cha-ching. The deal will go through.

[MUSIC PLAYING]

Robert Armstrong
We’ll be right back with Long/Short.

[MUSIC PLAYING]

Listeners, welcome back. Today we have a very special edition of Long/Short with extra speculative elements. The Nasdaq is down 7 per cent from its highs of late October, and what we are all wondering here at Unhedged World headquarters is whether the AI bubble is popping while we speak.

So, James, rest of the year, are you long or short? The Nasdaq?

James Fontanella-Khan
I’m going long.

Robert Armstrong
Woo.

James Fontanella-Khan
I’m a believer

Robert Armstrong
That’s why we bring you on. That’s why we bring you on the show, James. Guns blazing.

James Fontanella-Khan
And the reason I’m long is because this is a rare opportunity to buy a bit of that dip and it will sail back up to the top.

Robert Armstrong
I will preface my answer by saying nobody can predict stock price is over six week period, but that won’t stop me from predicting them. And I am short. I think the momentum is broken in these tech stocks and we’re gonna get a meaty correction into the end of the year. And what happens in 2026 is anyone’s guess. Listeners, we will be back in your ears with more guesses this Thursday.

[MUSIC PLAYING]

Unhedged is produced by Jake Harper and edited by Bryant Urstadt. Our executive producer is Jacob Goldstein. Topher Forhecz is the FT’s acting co-head of audio. Special thanks to Laura Clarke, Alistair Mackie, Gretta Cohn and Natalie Sadler. FT premium subscribers can get the Unhedged newsletter for free. A 30-day free trial is available to everyone else. Just go to ft.com/unhedgedoffer.

I’m Rob Armstrong. Thanks for listening.

[MUSIC PLAYING]

NZAOA, a group of 87 institutional investors managing USD 9.2 trillion in assets committed to achieving net zero across investment portfolios by 2050, welcomes the Summary Note on Presidency consultations and the Eleventh Letter from the Presidency published on 16 and 17 November respectively. NZAOA signatories have supported the UNFCCC Process, including through participating in the Baku to Belém Roadmap to 1.3T process and the Sharm el-Sheikh Dialogue.

Market momentum behind net zero is evident and the economic case for net zero remains strong. By the end of 2024, NZAOA signatories had deployed a total of $743 billion in climate solutions, representing 8% of their total asssets undr management, showing a strong commitment to supporting the transition to a low-carbon economy. Signatories are developing innovative approaches to climate investments, including in emerging markets.

To maintain positive momentum, policymakers gathered at COP should provide roadmaps to ensure that the promises of the 2023 Global Stocktake translate into concrete delivery. These must support mobilising investment, lending, and underwriting decisions, and enable corporate action, strengthening the transition from negotiation to implementation.

NZAOA particularly welcomes action in the areas of:

• Accelerated NDC Implementation
  Clarity, demand signals, and certainty for investors is critical to ensure financial flows are mobilised. Effective implementation of Nationally Determined Contributions (NDCs) and COP outcomes, underpinned by national policies and transparent reporting, creates clear policy signals and pipelines of investable projects. Their subsequent consistent implementation builds credibility and enables long-term investors to confidently allocate capital.
• International cooperation and active engagement with private sector
  International cooperation is needed to accelerate implementation and economic transformation. New and innovative approaches are required to unlock finance and support for emerging markets. Asset owners are working to develop attractive financing solutions that meet the needs of different stakeholders. Further acceleration of these successes hinges on collaboration between private and public sectors.
• Enabling policy environment
  Investors are making progress to account for and manage climate risk, in line with their fiduciary duties, but they are dependent on an enabling policy environment. Supportive policies can contribute to improving the risk and return profiles of investments while also closing value chain gaps. Reforming multilateral architecture remains important to improve financing climate action, including high costs of capital, limited fiscal space, unsustainable debt levels, high transaction costs and conditionalities for accessing climate finance. NZAOA has published expert papers that identify impediments and solutions for private capital mobilisation.

References

BELEM, Brazil (AP) — At the U.N. climate talks in Brazil, artificial intelligence is being cast as both a hero worthy of praise and a villain that needs policing.

Tech companies and a handful of countries at the conference known as COP30 are promoting ways AI can help solve global warming, which is driven largely by the burning of fossil fuels like oil, gas and coal. They say the technology has the potential to do many things, from increasing the efficiency of electrical grids and helping farmers predict weather patterns to tracking deep-sea migratory species and designing infrastructure that can withstand extreme weather.

WATCH: How the next wave of workers will adapt as artificial intelligence reshapes jobs

Climate groups, however, are sounding the alarm about AI’s growing environmental impact, with its surging needs for electricity and water for powering searches and data centers. They say an AI boom without guardrails will only push the world farther off track from goals set by 2015 Paris Agreement to slow global warming.

“AI right now is a completely unregulated beast around the world,” said Jean Su, energy justice director at the Center for Biological Diversity.

On the other hand, Adam Elman, director of sustainability at Google, sees AI as “a real enabler” and one that’s already making an impact.

If both sides agree on anything, it’s that AI is here to stay.

Michal Nachmany, founder of Climate Policy Radar, which runs AI tools that track issues like national climate plans and funds to help developing countries transition to green energies like solar and wind, said there is “unbelievable interest” in AI at COP30.

“Everyone is also a little bit scared,” Nachmany said. “The potential is huge and the risks are huge as well.”

Many sessions on AI

The rise of AI is becoming a more common topic at the United Nations compared to a few years ago, according to Nitin Arora, who leads the Global Innovation Hub for the United Nations Framework Convention on Climate Change, the framework for international climate negotiations.

The hub was launched at COP26 in Glasgow to promote ideas and solutions that can be deployed at scale, he said. So far, Arora said, those ideas have been dominated by AI.

The Associated Press counted at least 24 sessions related to AI during the Brazil conference’s first week. They included AI helping neighboring cities share energy, AI-backed forest crime location predictions and a ceremony for the first AI for Climate Action Award — given to an AI project on water scarcity and climate variability in the Southeast Asian nation of Laos.

Johannes Jacob, a data scientist with the German delegation, said a prototype app he is designing, called NegotiateCOP, can help countries with smaller delegations — like El Salvador, South Africa, Ivory Coast and a few in the Association of Southeast Asian Nations — process hundreds of official COP documents.

The result is “leveling the playing field in the negotiations,” he said.

In a panel discussion, representatives from AI giants like Google and Nvidia spoke about how AI can solve issues facing the power sector. Elman with Google stressed the “need to do it responsibly” but declined to comment further.

Nvidia’s head of sustainability, Josh Parker, called AI the “best resource any of us can have.”

“AI is so democratizing,” Parker said. “If you think about climate tech, climate change and all the sustainability challenges we’re trying to solve here at COP, which one of those challenges would not be solved better and faster, with more intelligence.”

WATCH: Key takeaways from COP30 halfway through the UN climate summit

Princess Abze Djigma from Burkina Faso called AI a “breakthrough in digitalization” that she believes will be even more critical in the future.

Bjorn-Soren Gigler, a senior digital and green transformation specialist with the European Commission, agreed but noted AI is “often seen as a double-edge sword” with both huge opportunities and ethical and environmental concerns.

Booming AI use raises concerns

The training and deploying of AI models rely on power-hungry data centers that contribute to emissions because of the electricity needed. The International Energy Agency has tracked a boom in energy consumption and demand from data centers, especially in the U.S.

Data centers accounted for around 1.5% of the world’s electricity consumption in 2024, according to the IEA, which found that their electricity consumption has grown by around 12% per year since 2017, more than four times faster than the rate of total electricity consumption.

The environmental impact from AI, specifically the operations of data centers, also includes the consumption of large amounts of water in water-stressed states, according to Su with the Center for Biological Diversity, who has studied how the data center boom threatens U.S. climate goals.

She said these operations will increase the national emissions of the U.S., historically the world’s largest polluter.

Environmental groups at COP30 are pushing for regulations to soften AI’s environmental footprint, such as mandating public interest tests for proposed data centers and 100% on-site renewable energy at them.
“COP can not only view AI as some type of techno solution, it has to understand the deep climate consequences,” Su said.

Associated Press writer Seth Borenstein in Belem, Brazil, contributed to this report. The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org This story was produced as part of the 2025 Climate Change Media Partnership, a journalism fellowship organized by Internews’ Earth Journalism Network and the Stanley Center for Peace and Security.