SoftBank discussed AI chips tie-up with Intel to challenge Nvidia

Good morning. We have an exclusive story today about how Barclays backtracked on plans to pull out of Israeli bond auctions and a visual investigation into European vessels fishing under African flags. More details below.

But first, the Financial Times has learnt that SoftBank held talks with Intel about producing an artificial intelligence chip to compete with Nvidia. The plan foundered, however, after the US chipmaker struggled to meet the Japanese group’s requirements.

Negotiations to partner with Intel, which have not previously been reported, would have accelerated SoftBank’s efforts to combine the designs of its crown jewel Arm with the production expertise of its latest acquisition, Graphcore, to create a rival to Nvidia’s market-leading AI chips, said people familiar with the matter.

The talks with Intel failed in recent months, in advance of the US chipmaker’s announcement of drastic cost-cutting plans which included thousands of lay-offs in early August, these people said.

Using Intel’s US foundry to manufacture AI chips could have allowed SoftBank chief Masayoshi Son to tap into funds from the Biden administration’s Chips Act. Here’s how Son now plans to place SoftBank at the centre of the AI boom.

Here’s what else I’m keeping tabs on today:

• Economic data: The UK reports preliminary second-quarter GDP, while the US has jobless claims and retail sales figures.

• Norway: The country’s central bank will discuss the “mystery” of the krone’s decline, but is expected to leave interest rates unchanged.

• Middle East: Gaza ceasefire talks mediated by the US, Egypt and Qatar take on fresh urgency today in the face of Iran’s potential retaliation against Israel for assassinating Hamas and Hizbollah leaders.

Five more top stories

1. Exclusive: Barclays drew up plans to pull out of future Israeli government bond auctions as it reviewed its exposure to the country under pressure from pro-Palestinian activists, according to people familiar with the matter. But the UK bank, one of seven foreign lenders that help the Israeli government sell new debt, informed Israel on Tuesday that it planned to continue to work as a so-called primary dealer.

2. Starbucks has awarded its new chief executive Brian Niccol cash and stock potentially worth more than $100mn, one of the largest hiring packages in US corporate history and four times larger than the sign-on deal offered to his ousted predecessor. Read the full story.

3. Exclusive: Kamala Harris has spent 10 times as much as Donald Trump on digital advertising since becoming the Democratic presidential candidate, forking out $57mn for Google and Meta ads compared with her opponent’s $5.6mn. The stark difference signals the campaigns’ diverging tactics in reaching voters. Read the FT’s analysis on campaign spending.

• Harris and crypto: The vice-president’s campaign should reject overtures from the industry’s lobby groups, writes financial reform advocate Dennis Kelleher.

4. Twenty-six Wall Street groups will pay $393mn to US regulators to settle the latest charges over staff messaging on platforms such as WhatsApp. The fines range from $400,000 to $50mn per company, the Securities and Exchange Commission said, noting that those that self-reported violations would pay “significantly lower” penalties. The fines show how far the probe has expanded from big investment banks to broker-dealers and investment advisers.

5. The World Health Organization has declared mpox, previously known as monkeypox, a public health emergency as the infectious disease spreads in Africa. Mpox can cause fever, skin lesions and sometimes death, and has become an increasing focus of concern as an example of the rising global threat of zoonotic diseases. Here are the countries experiencing a recent surge in cases.

Visual investigation

European fishing operations are heading into murkier waters as they race to meet the continent’s rising demand for seafood. EU vessels are taking up African flags, enabling them — whether intentionally or not — to operate under authorities with weaker standards or enforcement powers than the bloc or to skirt local restrictions on foreign boats. The FT’s latest visual investigation dives into a practice that campaigners say has driven overfishing and threatened food security and livelihoods in African fishing communities.

We’re also reading . . . 

• ChatGPT: Users in the UK have been flummoxed by OpenAI’s chatbot responding in Welsh to English-language queries.

• Weight-loss pills: Years before Wegovy, Swiss drugmaker Roche turned down a potential $14bn-a-year “mega-blockbuster” obesity treatment now being developed by rival Eli Lilly.

• Ikea: Is the furniture shop Dutch? Despite its Swedish roots, the centre of the flat-pack giant’s structure is now in the Netherlands, writes Richard Milne.

• Venezuela: Our Big Read today explores how Nicolás Maduro has managed to cling on to power through repressive tactics despite his disputed re-election.

Chart of the day

Elon Musk’s following on X has nearly doubled since his purchase of the social media platform less than two years ago, handing the billionaire a public megaphone to amplify his views.

Take a break from the news

Ever wish your loud, turbulent toilet flushed just a tad quieter? Or had features such as remote-control lids and inbuilt bidets? Helen Barrett peers inside the fiercely competitive, high-tech, high-ticket world of beyond-bog-standard loos.

Additional contributions from Benjamin Wilhelm and Harvey Nriapia