Musk's xAI in talks for $4.3 billion equity funding, Bloomberg News reports
June 17 (Reuters) - Elon Musk's AI startup xAI is in talks to raise $4.3 billion through an equity investment on top of its $5 billion debt funding plans, Bloomberg News reported on Tuesday, citing information shared with investors.
Between its founding in 2023 and when the debt sale was launched this year, xAI raised $14 billion through equity fundraising, the report said.
The Grok chatbot maker needs new funding, partly because it has already spent most of what it previously raised, according to the report.
XAI did not immediately respond to Reuters' request for comment.
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Reuters
34 minutes ago
- Reuters
Battery makers sweat as antimony shortage hits after China's export curbs
MELBOURNE, June 18 (Reuters) - When China restricts exports of a key mineral, sometimes the pain is sudden and even crippling - enough to spur a major outcry almost immediately. Other times, it takes longer to be felt. For the world's makers of lead-acid batteries, China's restrictions on critical mineral antimony that were put in place late last year have become a major headache - one that their customers also now have as sky-high procurement costs are passed on. "We consider it a national emergency," said Steve Christensen, executive director at the U.S.-based Responsible Battery Coalition, whose members include battery maker Clarios, Honda (7267.T), opens new tab and FedEx (FDX.N), opens new tab. He noted the key role batteries play in industry and civilian life, how antimony is used in military equipment, as well as the surge in spot prices. Antimony now costs more than $60,000 per metric ton, having more than quadrupled over the past year. "There are no quick solutions... We were completely caught off guard collectively, as an industry," he said. China likely produced 60% of all antimony supply in 2024, according to the United States Geological Survey. Much of antimony mined in other countries is also sent to China for processing. Beijing added the mineral to its export control list last September, requiring companies to gain licences for each overseas antimony deal. It then followed up in December with an outright ban on shipments to the U.S. - an action seen as retaliatory after Washington further restricted exports of advanced semiconductors to Chinese companies. China's global exports of antimony are now just a third of levels seen this time last year. Christensen said U.S. companies are hugely reliant on China for their supply of antimony and buyers are increasingly having to procure from an emerging "grey market", where sellers that have stocked up on the material are charging extremely high prices. China's restrictions on antimony precede its controls on rare earths and rare earth magnets that were imposed in response to U.S. President Donald Trump's tariffs and do not appear to have been discussed in last week's efforts to stabilise a truce in trade tensions between the two countries. Last week's talks between China and the U.S. also did not include any agreement on specialised rare earths such as samarium needed for military applications. Lead-acid batteries, commonly found in gasoline-engine vehicles, are mostly used to start the engine and to power low-voltage instruments. They are also used as sources of backup power in various industries and to store excess energy generated by solar and wind systems. In addition to batteries, antimony is also essential to military equipment such as night vision goggles, navigation systems and ammunition. Overall antimony demand is some 230,000-240,000 tonnes a year with lead-acid batteries accounting for about a third of that, according to consultancy Project Blue. While many battery makers may have access to antimony-lead alloy from recycled materials, Project Blue estimates they collectively need around 10,000 tonnes a year of higher purity antimony to top up the alloy to reach the right battery properties. Securing that additional portion could be challenging. Project Blue director Nils Backeberg said there is enough antimony outside China to satisfy non-Chinese demand but buyers need to compete with Chinese purchasers such as the country's huge solar industry, and China's smelters are able to offer better terms. "With antimony prices at nearly 5x normal market conditions, the cost becomes a factor and with supply limited on the Western market, a shortage is being felt," he said. For now, it seems that battery makers' antimony woes have not yet led to cuts in output, with companies like Germany's Hoppecke saying they have managed to pass on higher costs. Japan's GS Yuasa (6674.T), opens new tab said it has passed on costs to some customers and is negotiating with more of its customers to do so. One source at an Indian battery maker said antimony represented only a small cost of a battery and price increases were being passed onto customers, but any more price rises could spell trouble. "If the price does increase further, everyone (in the industry) will be vulnerable," said the source who was not authorised to speak to the media and declined to be identified. The companies and the source at the Indian battery maker declined to disclose the size of their product price hikes. In a sign that profits are being affected, India's Exide Industries ( opens new tab blamed high prices for antimony when it logged smaller-than-expected income for its fourth quarter. Christensen of the Responsible Battery Coalition said policymakers should treat the issue as one of national security, arguing that Western countries had become "overly reliant on a single geopolitical adversary for minerals foundational to both national defense and civilian life." "For the U.S., the path forward must include onshoring processing capacity, scaling domestic recycling, and building strategic mineral alliances with trusted partners. Otherwise, this crisis will repeat itself again and again," he added. Some baby steps towards building an antimony supply chain outside of China are being taken. Clarios, owned by global investment firm Brookfield, said last month it was scouting locations for an up to $1 billion critical minerals processing and recovery plant in the U.S. that will extract antimony among other minerals. Nyrstar, owned by global commodity trader Trafigura, also said last month it could produce antimony at its South Australian metals processing plant but would need government support to do so.
The Guardian
38 minutes ago
- The Guardian
Elon Musk's X sues New York over hate speech and disinformation law
Elon Musk's X Corp filed a lawsuit on Tuesday against the state of New York, arguing a recently passed law compelling large social media companies to divulge how they address hate speech is unconstitutional. The complaint alleges that bill S895B, known as the Stop Hiding Hate Act, violates free speech rights under the first amendment. The act, which the governor, Kathy Hochul, signed into law last December, requires companies to publish their terms of service and submit reports detailing the steps they take to moderate extremism, foreign influence, disinformation, hate speech and other forms of harmful content. Musk's lawyers argue that the law, which goes into effect this week, would require X to submit 'highly sensitive information' and compel non-commercial speech, which is subject to greater first amendment protections. The complaint also opposes the possible penalty of $15,000 per violation per day for failing to comply with the law. The bill's authors issued a statement on Tuesday rejecting Musk's suit as an attempt to 'use the First Amendment as a shield against providing New Yorkers with much needed transparency' and argued that the act does not infringe upon the free speech rights of social media companies. X successfully sued last year to block a similar law in California, which also required social media companies to disclose to the government how they define hate speech and extremism. Since Musk bought Twitter in 2022, he has heavily downgraded content moderation efforts and fought against attempts at regulating the platform. The Stop Hiding Hate Act was written by Brad Hoylman-Sigal, a New York state senator and Grace Lee, a state assemblymember, in cooperation with the Anti-Defamation League, with the intent of providing great transparency and accountability over harmful online speech. Lee and Hoylman-Sigal rejected a request last year from X to discuss and amend the bill, according to the state senator, on the grounds that they believed the company was not acting in good faith and only seeking to weaken the bill's requirements. 'Now more than ever, with the rise in political violence and threats emanating from the spread of hate speech and disinformation by President Trump and Elon Musk, New Yorkers deserve to know what social media companies like X are doing (or not doing) to stop the spread of hatred and misinformation on their platform,' Hoylman-Sigal and Lee said Tuesday. Sign up to TechScape A weekly dive in to how technology is shaping our lives after newsletter promotion Although Musk has described himself as a 'free speech absolutist', his platform X has targeted journalists and media outlets that post critical information about him. The platform suspended the accounts of several journalists in recent years that have reported on Musk and throttled links to news sites he has criticized. Musk also sued a non-profit that catalogued racist and extremist content on X, in a case that a US district judge threw out as an attempt to punish freedom of speech.
Reuters
43 minutes ago
- Reuters
Trading Day: Escalation fuels trepidation
ORLANDO, Florida, June 17 (Reuters) - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist A fifth day of war between Israel and Iran pushed oil prices higher and world stocks lower on Tuesday, as investors also digested some weaker-than-expected U.S. economic data and looked ahead to the Federal Reserve's policy decision on Wednesday. In my column today I look at data that show overseas central bank holdings of Treasuries and other U.S. assets parked at the Fed are now the lowest since 2017. By this measure, foreign central banks are de-dollarizing. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Escalation fuels trepidation Whatever hope there was on Monday for a de-escalation in the Iran-Israel conflict was obliterated on Tuesday as the two countries kept up attacks on each other, and the U.S. sent more fighter jets to the region and bolstered its forces there. Investors were further unnerved after President Donald Trump said on social media that the U.S. has no immediate plans to "take out (kill!)" Iran's Supreme Leader Ayatollah Ali Khamenei but Washington's patience is "wearing thin". Fading prospects of peace triggered a wave of 'risk off' activity across world markets. Stocks fell across the board, oil rose, government bond yields fell sharply and the dollar rediscovered its safe haven appeal to notch its biggest rise in over a month. Curiously, gold barely got any lift, perhaps struggling for renewed momentum so close to its all-time high of $3,500 an ounce. Instead, silver was the best-performing precious metal, climbing to a 13-year high above $37 an ounce. Adding to the caution were U.S. retail sales and industrial production figures, both of which were weaker than economists expected, at least at the headline level. If U.S. consumers are drawing in their horns and factories are feeling the squeeze even before tariffs hit, growth in the second half of the year will slow. The outlook for tariffs, growth and inflation - not to mention war in the Middle East - will guide the Fed's policy decision and revised economic projections on Wednesday. It's an increasingly difficult line for Chair Jerome Powell and his colleagues to tread. The Bank of Japan, meanwhile, adopted a more cautious stance on Tuesday. It left its short-term policy rate on hold at 0.5%, as expected, and voted to slow the pace of balance sheet rundown in fiscal year 2026. With the BOJ's policy rate likely to remain on hold for the rest of the year, according to market pricing, and the pace of balance sheet reduction not changing until March, the impact on Japanese assets in the near term could be limited. Not that investors will be getting complacent - the Israel-Iran war and Fed decision on Wednesday will see to that. Foreign central banks are shrinking U.S. asset exposure As debate rages around 'de-dollarization' and the world's appetite for dollar-denominated assets, one major cohort of overseas investors appears to be quietly backing away from U.S. securities: central banks. That's the conclusion to be drawn from the New York Fed's latest 'custody' data, which shows a steady decline in the value of Treasuries and other U.S. securities held on behalf of foreign central banks. There are many ways to gauge foreign demand for U.S. assets, and they often send conflicting signals. Moreover, the broadest and most accurate measures, like U.S. Treasury International Capital (TIC) or the International Monetary Fund's 'Cofer' FX reserves data, come with a long lag of two months or more. The New York Fed custody holdings figures are weekly, which is as 'real time' as it gets in the world of central bank flows. These figures last week showed that the value of U.S. Treasuries held at the New York Fed on behalf of foreign central banks fell to $2.88 trillion. That's the lowest since January, and the $17.1 billion decline was also the biggest fall since January. Including mortgage-backed bonds, agency debt and other securities, the total value of foreign central banks' U.S. custody holdings at the New York Fed last week dropped to $3.22 trillion, the lowest since 2017. That figure has fallen by around $90 billion since March, just before President Trump's 'Liberation Day' tariff debacle on April 2, with more than half of the decline coming from Treasuries. If these moves are representative of broader trends, then FX reserve managers are reducing their exposure to U.S. bonds, as a share of their overall holdings and in nominal terms too. It's not easy to get a firm handle on the exact composition of central banks' dollar-denominated assets, which are worth trillions and are spread across multiple sectors, jurisdictions and continents. This is why different cuts of central bank data can tell different stories. For example, the latest TIC data show that foreign holdings of U.S. Treasuries rose to a record $9.05 trillion in March, with official sector holdings increasing as well. The official sector held nearly $4 trillion of bills and bonds, around 45% of all foreign exposure. But these figures are nearly three months out of date, and foreign demand for Treasuries in recent months – in the secondary market and, more recently, at auction – has been driven by private sector institutions, not the official sector. There are large pools of 'hidden' FX reserves too potentially worth trillions of dollars, held in offshore accounts, overseen by quasi-official entities like sovereign wealth funds or, in the case of China, state banks. Meghan Swiber, director of U.S. rates strategy at Bank of America, says the fall in custody holdings is a warning sign, especially as it has been accompanied by a modest decline in foreigners' usage of the Fed's overnight reverse repo (RRP) facility. When Treasuries mature, foreign central banks will often park the cash at the RRP. But they haven't been doing that lately, Swiber says, meaning both their Treasury holdings and overnight cash balances at the Fed are falling. "We worry about foreign demand going forward," Swiber wrote on Monday, also pointing out that it's "unusual" for reserve managers to reduce their U.S. Treasury holdings when the dollar is weakening. "This flow likely reflects official sector diversification away from dollar holdings." The $28.5 trillion Treasury market is deep and liquid, and central banks remain significant participants in it. They are cautious and careful by nature, meaning any changes to their holdings will be gradual. But the weekly custody data suggest some central banks may already be getting that ball rolling. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
