Silicon Valley steps up vetting of employees over fears of Chinese spying | Invesloan.com

Good morning. We have an exclusive story from Silicon Valley, where companies are escalating their security vetting of staff and potential recruits as US officials voice greater concern about the threat of Chinese espionage.

Technology giants such as Google and high-profile start-ups like OpenAI have stepped up their screening of personnel, according to several people working directly with the groups. The move comes amid fears that foreign governments are seeking to use compromised workers to access intellectual property and company data.

Venture capital firms such as Sequoia Capital, which backs dozens of start-ups including Elon Musk’s xAI, have also encouraged some portfolio companies to tighten staff vetting after warnings that spy agencies are targeting US tech developers, the people said. Here’s more on what Palantir’s chief has called “a huge problem”.

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

• EU: The European Commission is set to open a so-called excessive deficit procedure against France for breaching the bloc’s borrowing limit of an annual 3 per cent of GDP.

• Economic data: The UK and South Africa publish their May consumer price indices. The UK also has its producer price and house price indices.

• Companies: Berkeley Group and Young & Co report. Hargreaves Lansdown has requested the extension of a deadline today for private equity firms led by CVC Capital Partners to make an official offer for the UK’s largest retail investment platform.

• Markets closed: The US commemorates the ending of slavery with the Juneteenth holiday.

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Five more top stories

1. Exclusive: Zilch has warned it could list abroad without UK government measures to boost capital markets and investment in tech companies. Chief executive Philip Belamant said the eBay-backed payments company with 4mn customers was waiting to see policies aimed at fostering “liquidity and excitement around IPOs”. Read the full story.

• European listings: Italian luxury sports brand Golden Goose has postponed plans for what would have been among the most high-profile IPOs in Europe this year.

• 🎬 Watch: What is the UK doing to improve the City’s competitiveness as an international capital market?

2. Exclusive: Starling Bank is pursuing several debtors that have never shown signs of active trading, as the London-based fintech that relied on government-backed Covid-19 loans battles rising defaults and a probe into its financial-crime controls. Since May, Starling has filed winding-up petitions against 24 companies that have defaulted on loans, UK court filings show. More details from the Financial Times’ analysis.

3. Israel’s military said senior officers had approved “operational plans for an offensive in Lebanon”, hours after Iran-backed Hizbollah released a nine-minute video of what it said was footage gathered by its surveillance drones of parts of Israel, including Haifa’s port. Exchanges of fire between the Lebanese militant group and Israeli forces have escalated recently. Here’s more from Israel’s remarks yesterday.

• US arms: Israeli Prime Minister Benjamin Netanyahu has slammed President Joe Biden’s decision to withhold a shipment of large bombs to Israel as “inconceivable”.

• Gaza: Armed gangs, including Hamas-backed groups, have plundered at least $120mn from banks in the enclave’s north in the past two months, according to UN estimates.

4. The biggest glut of copper in four years has built up in Chinese warehouses after a price spike and tepid consumer demand prompted manufacturers in Asia’s largest economy to pull back on buying the world’s most important industrial metal. One analyst said wire and cable manufacturers were under “tremendous pressure” and the excess metal “simply cannot be consumed”.

5. Exclusive: Labour is pledging to ease planning restrictions on onshore wind farms in England “within weeks” if it wins the general election. Shadow energy secretary Ed Miliband will say today that there “is not a moment to waste” in Labour’s plans to overhaul the energy system, which the party has argued will help bring down household bills and create jobs. Rachel Millard has more details.

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The Big Read

Millions of Americans are opting to continue buying combustion-engine cars over electric vehicles, despite President Joe Biden’s ambitious target of having EVs make up half of all new cars sold in the US by 2030. High sticker prices for cars on the forecourt, and high interest rates that are pushing up monthly lease payments, have combined with concerns over driving range and charging infrastructure to chill buyers’ enthusiasm, even among those who consider themselves green.

We’re also reading . . . 

• EU politics: The bloc must prepare for five years of radical change or risk being left behind by the US and China, writes Laurence Boone, a former French minister of state for Europe.

• Chicken feet: Animal parts that Europeans shun but sell to China as delicacies are now on the chopping block in Beijing’s fight against tariffs, writes Andy Bounds.

• Guinness Nigeria: Diageo recently sold its stake to family-run Tolaram, as groups with a larger local footprint in the African nation grab opportunities created by western exits.

• Remote work: The contentious issue of working from home has become an ideological battleground that needs a scientific approach, writes Anjana Ahuja.

Chart of the day

From the US to China, industrial policy is back as a powerful motivator for government intervention, writes Martin Wolf. As it becomes more pervasive in discourse and practice, politicians need to approach their decisions with care. Success is as much a risk as failure.

Take a break from the news

From a guide that demystifies baking to an illustrated London pub crawl first published 75 years ago, FT Magazine’s Harriet Fitch Little selects her best summer books of the year on food and drink.

Additional contributions from Benjamin Wilhelm and Gordon Smith