Category: 3. Business

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During the 2010s tech boom, Silicon Valley’s uniform was the hooded sweatshirt. Mark Zuckerberg caused a stir on Wall Street in 2012 when the young chief executive had the audacity to wear a hoodie to pitch investors during Facebook’s roadshow for its initial public offering. That was when paying $1bn for fledgling photo-sharing app Instagram seemed sensational.

These days, the twenty-something founders in San Francisco are wearing $2,000 Moncler vests. And a billion dollars, once the hallmark of a feted “unicorn”, has become the price of entry, not exit, for artificial intelligence start-ups. 

In recent months, several small teams of entrepreneurs and researchers exiting the likes of Google DeepMind and OpenAI have been able to walk into venture capital firms and demand upwards of $1bn to fund a new idea for a “frontier” AI model developer — and walk out with a clutch of offers, sometimes in a matter of days. 

The past few weeks have taken deep chunks out of the market values of tech stocks including Nvidia, Microsoft, Oracle and Palantir. But if AI bubble fears are stalking Wall Street, they are yet to reach Sand Hill Road, where dealmaking is frenzied. 

The consistent message from those investors is that they will keep ploughing money into private AI start-ups regardless of what happens to the public markets. Even in the event of a US recession, one VC argued, it would merely be the non-AI start-ups that would suffer. 

VCs acknowledge that AI mania will inevitably cause heavier-than-usual losses in their industry, where funds typically have one or two hits out of 10 investments. But they are hewing to the idea that the winners will be so enormous, the many losers won’t matter. 

That makes the pressure to do deals intense. In the AI era, founders have all the leverage. That is a key difference to the mobile boom of the mid-2010s. Then, it seemed like anyone could come up with an app worth millions overnight (and often disappear just as quickly — anyone remember Flappy Bird or Yo?). 

Today the most scarce commodity in AI is not Nvidia chips, it is talent. Many top researchers are realising that they can command top dollar by leaving Big Tech to start their own companies. 

The trendsetters here were Ilya Sutskever and Mira Murati, the former chief scientist and chief technology officer of OpenAI. Their start-ups, Safe Superintelligence and Thinking Machines Lab, were valued in the tens of billions within a year of their creation. “Thinkies” is said to be closing in on a new fundraising valuing it at $50bn, up from $12bn in July.

Now Amazon founder Jeff Bezos is jumping on the bandwagon. His new start-up, called Project Prometheus, has reportedly raised more than $6bn to develop manufacturing-focused AI from investors.

But even without the allure of those big names, there are many more of these new-wave frontier labs coming. Last month Reflection AI, led by two former Google DeepMind researchers, announced a $2bn fundraising to build a new “open” model, aiming to counter China’s DeepSeek. Others are more narrowly focused on robotics or scientific research, or abandoning today’s large language models for a new approach, such as “world models” or “multimodal” systems. This reflects a growing sense that more value will accrue to underlying AI systems, not the app developers who build on top of them. 

It is also a testament to appetite from those VCs who passed on OpenAI, Anthropic or xAI when they were valued in the tens of billions and can’t bring themselves to pay up now they are priced in the hundreds of billions. They still need to show their investors that they have a bet in the frontier AI model race. 

Founders are not afraid to exploit this fear of missing out. One VC told me of an encounter with an AI engineer who was looking to raise hundreds of millions for a new model start-up. The CEO proclaimed he already had commitments of $100mn apiece from multiple marquee VC firms. The next lucky investors had a weekend to decide if they were in for the same. There was no time for due diligence of any conventional sort.

If things go wrong, the soft landing for these companies could be a multibillion-dollar “acqui-hire” from an AI talent-starved Big Tech group. The potential upside? On Sand Hill Road last week, a veteran investor confidently predicted that at least one of the current crop of AI labs would hit a trillion-dollar valuation within the next 24 months, even before going public. When the 2027 IPO roadshows come around, hoodies will be the least of Wall Street’s worries.

tim.bradshaw@ft.com

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‘Defining moment’

The Climate and Clean Air Coalition (CCAC), the International Council on Clean Transportation (ICCT), and C40 Cities today announced a strategic partnership to accelerate the global transition to zero-emission non-road mobile machinery, beginning with construction equipment. The collaboration will scale city, national, and regional efforts to replace diesel-powered machinery with electric alternatives—cutting climate pollutants, improving urban air quality, and supporting a just transition for workers and industry.

The non-road sector—comprised mostly of construction and agricultural machinery—emits over 1 billion tonnes of CO2, 3 million tonnes of methane (CH4), and 250,000 tonnes of black carbon (BC) annually, exceeding the climate footprint of the global maritime sector. Construction machinery alone contributes around 40% of those emissions, making it one of the largest and most immediate opportunities for action.

Norway’s Minister of Climate and Environment, Andreas Bjelland Eriksen, launched the partnership during an event at the Super Pollutant Solutions Pavilion. “This collaboration will be key to elevate non-road emissions onto the climate agenda. The electrification of construction machinery is a good starting point, where Norway and the City of Oslo have relevant experience. A key point to succeed is to dismantle barriers to adoption”.

“Non-road machinery is the next frontier to help us tackle climate change and air pollution,” said Martina Otto, Head of Secretariat, Climate and Clean Air Coalition (CCAC). “Electrifying construction equipment is a fast and very visible way to cut black carbon—a powerful short-lived climate pollutant—while delivering a quieter and healthier environment, for workers and citizens. This partnership combines policy leadership, technical expertise, and on-the-ground know-how to take this turn .”

The benefits go beyond climate. In major markets, non-road equipment drives 50–70% of particulate matter (PM) and about 30% of nitrogen oxide (NOx) from mobile sources—key drivers of poor air quality and ozone formation. Replacing diesel engines with electric motors helps cities move toward World Health Organization air-quality guidelines and delivers immediate health benefits for urban residents.

Encouragingly, more governments are setting zero-emission transformation goals and policies for the non-road sector, supported by rapid technological progress and a growing market. Electric machinery has advanced across equipment types—including compact loaders and excavators—with model offerings expanding and performance increasingly matching diesel in key duty cycles. Manufacturers are investing in electrified product lines, signaling a clear shift from niche pilots to broader market readiness.

“We’re seeing remarkable technological progress in the non-road sector,” said Drew Kodjak, President and CEO at ICCT. “Dozens of electric models are now available across construction machinery categories, and governments are beginning to align industrial, air-quality, and climate policy to accelerate adoption. This partnership will connect technology, policy, and implementation—helping countries and cities design and implement the standards, incentives, and procurement frameworks that make zero-emission construction machinery the norm.”

Cities are central to this effort. They experience the brunt of construction-site noise and pollution, and most construction happens within city limits. Cities are already showing electrification is possible through pilots and procurement. “Cities are on the front line of both the problem and the solution,” said Mark Watts, Executive Director at C40 Cities. “By electrifying construction equipment, we protect residents’ health, reduce noise, and cut climate pollution. Working with CCAC and ICCT, we’ll help cities move from pilots to full-scale deployment—setting policies that align clean-construction equipment supply and demand and drive a fair, resilient transition for all.”

This partnership marks a turning point for an often-overlooked sector. Together, the CCAC, ICCT, and C40 will elevate non-road equipment on the global climate agenda to unlock the attention and investment needed for large-scale transformation.

C40 is a network of nearly 100 mayors of the world’s leading cities collaborating to deliver the urgent action needed to confront the climate crisis and create a future where everyone, everywhere, can thrive.

Unlock the Editor’s Digest for free

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

The chief executive of Italian bank Banca Monte dei Paschi di Siena is under investigation for alleged market manipulation and obstruction of supervisory functions in connection with its takeover of rival Mediobanca.

MPS said on Thursday that it had received a search warrant and its chief executive Luigi Lovaglio had been served a “notice of investigation by Milan’s prosecutor’s office in his capacity as chief executive officer”.

Milanese prosecutors are also investigating MPS and its top shareholders Delfin and Francesco Gaetano Caltagirone for alleged market manipulation and obstruction of regulatory functions, according to three people familiar with the details of the investigation.

Delfin and Caltagirone were also top shareholders in Mediobanca.

The investigation was first reported by Italian newspaper Corriere della Sera.

Delfin declined to comment. Caltagirone did not immediately reply to a request for comment.

MPS said it was “confident it can provide all the necessary information to clarify the correctness of its actions and expresses its full trust in the competent authorities, with whom it confirms its full co-operation”.

Shares in MPS fell more than 4 per cent in afternoon trading in Milan.

This is a developing story

Campbell’s has dismissed an executive who allegedly referred to the soup company’s products as being made for “poor people” and denigrated its Indian employees.

Martin Bally, who was the vice-president of Campbell’s information technology department, was recorded making the alleged comments by another employee.

Campbell’s – which started producing canned condensed soup in 1897, and whose cans feature in some of Andy Warhol’s best-known 1960s pop artworks – said it had reviewed the recording and believed the voice to belong to Bally.

Campbell’s made “highly processed food” and “shit for fucking poor people”, Bally reportedly told a former employee, Robert Garza, according to a wrongful termination lawsuit filed by Garza.

In an hour-long rant, broadcast by a Michigan TV station, Bally goes on to say: “Who buys our shit? I don’t buy Campbell’s products barely any more. It’s not healthy now that I know what the fuck’s in it … bioengineered meat.

“I don’t wanna eat a piece of chicken that came from a 3D printer.”

Allegedly referring to Campbell’s employees of Indian heritage, Bally said: “Fucking Indians don’t know a fucking thing … Like they couldn’t think for their fucking selves.”

Garza, who was a security analyst at Campbell’s, told a local news outlet he recorded Bally when he met him to discuss his salary and felt something was not right. He is now suing the company for unfair dismissal and is alleging that Bally made racist remarks, admitted to being under the influence of drugs at work, and retaliated when Garza tried to make a complaint about him.

Campbell’s – which rebranded last year, dropping “soup” from its name to reflect a move to selling more snack foods – apologised for the “hurt” caused by Bally’s comments, which it described as “vulgar, offensive and false”.

In a statement, Campbell’s said Bally had been dismissed, adding: “This behaviour does not reflect our values and the culture of our company, and we will not tolerate that kind of language under any circumstances.”

Campbell’s dismissed Bally’s allegation that the chicken used in its soups was “bioengineered”, calling the comments about its food “not only inaccurate – they are patently absurd”.

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The company said: “The chicken meat in our soups comes from long-trusted, USDA [United States Department of Agriculture] approved US suppliers and meets our high quality standards. All our soups are made with no antibiotics ever chicken meat. Any claims to the contrary are completely false.”

New Jersey-based Campbell’s can trace its history back over 150 years. In more recent times, it has expanded its product range to include more snacks and owns brands including V8 drinks, Prego sauces and Kettle Brand, the maker of Kettle Chips.

Bally has been approached for comment.

The first dispute (35-page / 1.3MB PDF) is between Amgen on the one hand and Sanofi and Regeneron on the other, concerning two products – Amgen’s evolocumab, sold under the brand name Repatha, and Sanofi’s and Regeneron’s alirocumab, sold under the brand name Praluent. Both products are therapeutic monoclonal antibodies used to treat and prevent ailments caused by high cholesterol levels, especially when patients do not respond adequately to changes in diet and treatment with statins. 

The second dispute (53-page / 2.5MB PDF) is between Edwards Lifesciences Corporation (Edwards) and Meril Life Sciences group (Meril) in relation to Edwards patents relating to a prosthetic heart valve it manufactures and rival Meril valve products.

The decision in the Amgen v Sanofi and Regeneron case is the first UPC Court of Appeal decision ‘on the merits’, which is where the court hears arguments – and rules – on the substantive legal issues at hand, as opposed to just dealing with preliminary or procedural matters.

Under the holistic approach that the Court of Appeal has endorsed, the first step in assessing whether there has been an inventive step is to determine a ‘realistic starting point’ in the prior art that would have been of interest to the skilled person considering a similar underlying problem as that which the patent claimed to solve. 

“This must be done by establishing what the invention adds to the state of the art, not by looking at the individual features of the claim, but by comparing the claim as a whole in the context of the specification and the drawings, thus also considering the inventive concept underlying the invention (the technical teaching), which must be based on the technical effect(s) that the person skilled in the art, on the basis of the application, understands is (are) achieved with the claimed invention,” the Court of Appeal said.

The UPC Court of Appeal also confirmed that determination of a realistic staring point should not be made with the benefit of hindsight. It said there can be more than one realistic staring point – in those cases “the claimed invention must be inventive starting from each of them”.

“A starting point is realistic if the teaching thereof would have been of interest to a person skilled in the art who, at the effective date, wishes to solve the objective problem,” the court said. “This may for instance be the case if the relevant piece of prior art already discloses several features similar to those relevant to the invention as claimed and/or addresses the same or a similar underlying problem as that of the claimed invention.”

Once a realistic starting point has been determined, the next step involves assessing whether it would be obvious for the skilled person to arrive at the claimed solution in the patent from that point.

In this regard, the Court of Appeal said: “The claimed solution is obvious when at the effective date the person skilled in the art, starting from a realistic starting point in the state of the art in the relevant field of technology and wishing to solve the objective problem, would (and not only ‘could’) have arrived at the claimed solution”.

The court said this assessment is to be made with a view to the person skilled in the art having “no inventive skills and no imagination” and requiring “a pointer or motivation … that, starting from a realistic starting point, directs them to implement a next step in the direction of the claimed invention”.

It added: “As a general rule, a claimed solution must be considered not inventive/obvious when the person skilled in the art would take the next step, prompted by the pointer or as a matter of routine, and arrive at the claimed invention. For an inventive step to be present, it is not necessary to show improvement of the technical teaching as defined by the patent claims over the prior art. Inventive step may also be found if the patent claims disclose a non-obvious alternative to solutions known in the prior art.”

According to the Court of Appeal, the expectations of the skilled person in taking the ‘next step’ after a realistic starting point has been determined will also be informative of whether a patent’s claims are obvious and lacking an inventive step.

The court said: “A claimed solution is obvious if the skilled person would have taken the next step in expectation of finding an envisaged solution of his technical problem. This is generally the case when the results of the next step were clearly predictable, or where there was a reasonable expectation of success. The burden of proof that the results were clearly predictable or the skilled person would have reasonably expected success, i.e. that the solution he envisages by taking the next step would solve the objective problem, lies on the party asserting invalidity of the patent.”

“A reasonable expectation of success implies the ability of the skilled person to predict rationally, on the basis of scientific appraisal of the known facts before a research project was started, the successful conclusion of that project within acceptable time limits. Whether there is a reasonable expectation of success depends on the circumstances of the case. The more unexplored a technical field of research, the more difficult it was to make predictions about its successful conclusion and the lower the expectation of success. Envisaged practical or technical difficulties as well as the costs involved in testing whether the desired result will be obtained when taking a next step may also withhold the skilled person from taking that step. On the other hand, the stronger a pointer towards the claimed solution, the lower the threshold for a reasonable expectation of success,” it added.

The court said that the burden of proof will shift to those claiming obviousness if patent rights holders are able to “sufficiently substantiate” uncertainties and/or practical or technical difficulties relating to the problem that the invention is supposed to solve.

Applying this holistic approach, the UPC Court of Appeal overturned the earlier decision taken by the Munich Central Division of the UPC in the Amgen v Sanofi and Regeneron case, finding that Amgen’s patent is valid.

In the Edwards v Meril case, the Court of Appeal largely rejected appeals by Meril against decisions taken by the Paris Central Division of the UPC and the Munich local division of the UPC respectively, confirming the validity of Edwards’ patents at issue and maintaining, albeit with some amendments, injunctions imposed on Meril regarding the supply of its rival products.

Patent law expert Sarah Taylor of Pinsent Masons said: “The Court of Appeal’s approval of this holistic approach indicates that the UPC is willing to create its own law. That said, it is clearly inspired by the EPO’s approach, and it is interesting that both decisions indicated that, despite the differences in approach between national courts and the EPO, they generally all lead to the same conclusion, supporting the UPC’s broader aim of aligning with EPO case law.”   

“Many Court of Appeal decisions to-date have helped to present the UPC as a largely patentee-friendly forum, and while the outcomes in both of these cases were patentee-friendly, this holistic approach offers more flexibility to those challenging patent validity and may result in challengers being drawn more to the UPC. It will be interesting to see if the clarification on the approach to inventive step encourages even more engagement with the UPC, particularly by challengers in the pharmaceuticals space,” she said.

“The Edwards v Meril decision also contains practical considerations for businesses on both sides of a patent disputes, with the Court of Appeal confirming a pragmatic approach to injunctive relief when patient interests are at stake,” added Taylor. 

The Court of Appeal confirmed that an exception to the right to injunctive relief may be justified where the infringing embodiment – in this case Meril’s extra large valves – is the sole available treatment. The Munich local division had already acknowledged that Edwards offered no equivalent to these larger valves, but determined that Meril’s extra large product should only be excluded from the scope of the injunction once a team at Edwards had approved their use. The Court of Appeal found that the availability of these products should not depend on Edwards’ approval and amended the relief to carve these products out of the scope of the injunction.