Reform UK mega-donors stir controversy

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0:32Good morning from the Financial Times. Today is Friday, September 18th, and this is your FT News Briefing. Venezuela is close to a golden deal, and we look at Reform UK's controversial donations. Plus, a softbank data center company is under pressure because OpenAI has delayed its IPO. I'm Sonia Hudson in for Mark Filipino, and here's the news you need to start your day.

1:07The Venezuelan government and the opposition are close to an agreement about the country's gold reserves. It would end a seven-year-long dispute over who controls the resource. And it would be one of the first concrete results from a U.S.-backed negotiation process. The deal would transfer$4 billion of gold stored in the Bank of England to the Federal Reserve in New York. The agreement would allow the government to gain legal control over the reserves, but it couldn't immediately sell the holdings. That's according to three people familiar with the discussions. Instead, the gold could potentially be used as collateral for government borrowing.

1:50That could fund spending for things like recovery from the devastating double earthquake in June. The UK Foreign Office declined to comment. The Venezuelan government and the opposition also declined to comment.

2:09Reform UK is under scrutiny for its donations. The right-wing party recently received record-breaking contributions from two crypto billionaires. Ben Dello and Christopher Harbourn contributed a combined£72 million to the movement, which was founded by Nigel Farage. The FT has now learned that Dello previously financially supported a controversial libel claim regarding alleged anti-Semitism. Here to talk about it is my colleague David Shepard. Hi, David. Hi there. So, David, it's been a busy week for reform. Just very quickly, get us up to speed on what's happened. Well, on Friday night, there was a big shock in UK politics because Ben Dello, a cryptocurrency billionaire, suddenly announced that he was donating£36 million to the Reform UK party.

3:04Just as people in UK politics were starting to get over the shock of that, Suddenly, Christopher Harbourn, who was prior to Bendello, the biggest donor to Reform UK, came out and said on Saturday lunchtime, I'm matching it. Both those donations individually are more than three times larger than any we've seen before in the UK. Perhaps our American listeners might be rolling their eyes at that going, 36 million? You're a cheap country? What is this? So suddenly you had this huge influx of money into the upstart party, and it's really shaken up Westminster this week. So Harburn was Reform's previous biggest donor.

3:45Tell me about Dello and what you found from looking into him. Well, he's also backed the free speech union in the UK, and he has provided office space and sort of other facilities in Westminster itself, basically creating a hub for groups that share similar crossover and right wing views. We learned that Bendello provided£300 ,000 or more in financing to a plaintiff in a defamation case against the Jewish artist Luke Turner. It's a complicated legal case, I think it's fair to say. Luke Turner claimed that he'd been targeted with anti-Semitism online. The plaintiffs objected to the fact that he had described him as anti-Semitic and otherwise and decided to sue.

4:41Luke Turner countersued, saying that he'd been a victim of harassment by these two individuals. Ultimately, the judge ruled that the defamation case did not stand up. She also ruled that Luke Turner's countersuit didn't quite meet the high legal standard for harassment. So that was dismissed as well. Now, we should say that Turner and Dello did not provide comment for publication for this article, as well as the plaintiff that Delo supported named Nina Power. But David, can you tell us why is all this important on a broader scale? This is interesting because Delo's in the spotlight right now because it also shines a light on some of his activities around funding groups and individuals who have, in the critics' eyes, at times tested the boundaries of what is acceptable within robust democratic debate.

5:39How does this all fit in with the conversation that people are having in the UK about megadonors and reform? Critics suggest that this is an attempt by Nigel Farage and Reform UK to buy the election. Megadonors have not really been a thing. Absolutely, there have been wealthy individuals that have put in a few million here, a few million there. but to see these kinds of figures come in it's really sort of shaken up the UK political establishment and it also comes at a time when the Labour government had been vowing to crack down on campaign finance and actually there's a bill in parliament at the moment that would seek to restrict the amount of money coming into UK politics when British citizens were based overseas which, depending on what time frame you're looking at, could apply to both Christopher Harbourn and Ben Dello.

6:37Harbourn's been based in Thailand, Dello in Hong Kong. That's the FT's David Shepard. Thanks, David. Thank you for having me.

6:51The commodities giant Glencore has suspended one of its senior executives. This comes in the wake of a scandal involving the company's ties to the iron ore trader Radiant World. Peter Hill is Glencore's head of steelmaking raw materials. He's been taken off his job pending the outcome of a review into the company's business with Radiant World and other associated companies. That's according to a person familiar with the matter. A few days ago, Radiant filed a$2 billion legal claim in Singapore against three Glencore entities. It alleged that the group kept the true nature of the company's trading arrangements out of its audited records.

7:34Glencore said the claims in the lawsuit were without merit. It also said it had evidence that these companies, quote, sent falsified invoices and contracts as well as fabricated emails. Radiant has denied any wrongdoing.

7:54The circular nature of financing in the AI industry could be coming under pressure soon. Take, for example, SB Energy. It has leased out its future data centers to OpenAI. And OpenAI is also set to have a stake in SB Energy. That company is also part of legendary investor Masayoshi Sun's SoftBank empire, which is crucially one of OpenAI's financial backers. So what happens when OpenAI decides to delay its IPO or if it's forced to slow down its technology's development? Here to talk about it is the FT's George Hammond. Hi, George. Hey, Sonia. So, George, OpenAI was expected to IPO this year, but they have now pushed that back a little bit.

8:44What are you hearing about how that's impacting other companies in the AI space? Yeah, so OpenAI filed their S1 paperwork, which basically is the kind of starting gun on a potential IPO process. They did that in June, but they have pushed that off into at least next year. And Chief Executive Sam Allman has said that this would be an ill-advised time to go public, partly because of concerns about AI's threat to human civilization and existential risk. and basically what this does is create some uncertainty in the market because the company is really the the bellwether of ai sentiment and it has a huge supply chain on which it relies to create and train run its new models within that are data center operators chip makers distribution partners and all of those companies are very closely watching this ipo and and in general watching OpenAI's development because their future hinges on it to a great extent.

9:44And talk to me a little bit about SB Energy in particular. What exactly is the problem for that company now that OpenAI is delaying its IPO? So SB Energy is a fascinating company. It's very of the times. It's a data center operator and developer. They're targeting an IPO at a$50 billion valuation. and they're yet to build any data centers. So they are kind of squarely in this group of companies who are exposed to OpenAI's fate, partly because OpenAI is the main lessor of the company's future data centers. And they also have a financial relationship which gives OpenAI warrants for a stake of around 5.5 billion in the company.

10:31So they are very, very closely tied together. But there is a hedge. One part of that is that these are very long-term leases. So even if there are short-term fluctuations in AI demand, there is regulation, there is a decision by the companies to slow down. The leases that OpenAI has signed with SP Energy cover close to 20 years. So the expectation is that those leases will be made good. And if they're not, and if there is a real crisis for OpenAI, then overall demand for AI is likely to mean that somebody else will step in to take the place. And we should say that SB Energy and SoftBank both declined to comment.

11:11But George, what does this tell us about the interconnected world of AI finance? I think it tells you that it's very, very hard to get a real value for these companies because the relationships are so overlapping and convoluted that assessing who is gaining because they have a strategic relationship versus who is gaining because there is a straightforward commercial outcome, it gets very muddy. And in SB Energy's case, as I mentioned, the kind of primary leaseholder on these sites is going to be OpenAI. Their main chip partner is NVIDIA. NVIDIA has invested into OpenAI. OpenAI has invested into SB Energy.

11:53SoftBank has invested into open AI. And what that interconnection means is that when one of these companies slows down, there is a risk that the rest will, in chain, also have to slow down. And that could compound by the fact they've had these very, very closely net relationships. George Hammond covers venture capital for the FT. Thanks, George. Thank you. You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. check back next week for the latest business news. The FT News Briefing is produced by Safia Ahmed, Josh Gabbert-Dwayon, Katya Kumkova, and me, Sonia Hudson.

12:33Our show is mixed by Kelly Gary and Sam Giavinko. We get help from Peter Barber, Michael Lello, David DaSilva, and Gavin Kallman. Our executive producer is Topher Forges. Flo Phillips is the FT's global head of audio. And our theme song is by Metaphor Music.

13:04The new episode of The Next Five is all about the freedom to invent with AI. Steve Tarza at Amazon joins me. I think there's such a huge opportunity for innovation. As does Jim Rowan at Deloitte. We see that when the C-suite is using AI, they get their teams on board as well. And Seth Fox at S &P Global. Our data is our crown jewels. We have to draw a bit of a line around the data, but not around the idea. Listen to The Next Five wherever you get your podcasts. Enjoy. Capital raising is being redefined in real time, from macro disruptions and shifting investor expectations to AI-driven demand and the rise of private credit.

13:44When headlines can tilt markets overnight, how can companies stay on course? Strategic Alternatives, the RBC Capital Markets podcast, explores how corporates and investors are navigating new pathways to raise capital, create value, and drive growth. When conditions change, alternatives matter. Listen to Strategic Alternatives, available wherever you get your podcasts.