Koch Industries’ bet on batteries

Charles Koch, CEO of Koch Industries, a sprawling energy and commodities conglomerate, funds conservative groups that raise concerns about climate change, part of the significant political influence his family wealth has. Over the past few years, Koch has also been a major investor in batteries, a key technology in global efforts to reduce carbon emissions.

A division of Koch Industries believes that the fast-growing electric vehicle industry will generate a huge demand for better batteries. His list of investments includes Aspen Aerogels, Eos Energy Enterprises, Standard Lithium and now Blue Current, a startup run by one of Silicon Valley’s favorite scientists, Joseph DeSimone. Koch Strategic Platforms is investing $ 30 million in Blue Current, which it will use to build a pilot project and put it into production, DealBook is the first to announce.

“We will need a lot of batteries,” Elon Musk said at last year’s Tesla event. Wood Mackenzie estimates that 18 percent of new cars sold will be electric by 2030, far exceeding current battery power. Battery production is dominated by companies such as Tesla, Panasonic and LG Chem, but new players are emerging. Risky investors in the United States are investing $ 1.8 billion in the industry in 2021, well above any previous year, according to PitchBook.

DeSimone helped Blue Current attract noise. He is cited in more than 200 patents and left a long academic career in science at the University of North Carolina at Chapel Hill and North Carolina State University to found Carbon, a 3-D manufacturing company, in 2013 (The company raised $ 680 million in private funding.) DeSimone stepped down as CEO in 2019, becoming chairman of the board and joining Stanford faculty the following year. Since then, Silicon Valley has been wondering: What’s next?

Blue Current has been stealth mode since 2016, when DeSimone founded it with Nitash Balsara, a professor at UC Berkeley. The company relies on solid silicon as an excellent technology compared to batteries that rely on lithium and liquid electrolytes, which are highly flammable. Battery fires are a real problem for electric vehicles: last year, General Motors had to replace lithium-ion battery modules in 141,000 cars after some caught fire. Solid state batteries using lithium or silicon are the next big thing for investors, but Blue Current says its silicon-based batteries are safer and have a particularly high energy density, which means more charge in less space.

No battery type is “yet ready for prime time,” said Venkat Srinivasan, director of the Center for Collaborative Energy Storage Science at the National Laboratory in Argon, who did not directly evaluate Blue Current technology. The big question is whether companies in this fast-growing industry can increase production enough to become commercially viable. Blue Current now has new funds from a high-profile investor to prove itself.

Oil executives are facing a grill over high gas prices. At a congressional hearing today, leaders of Exxon, Chevron and other energy companies are likely to be asked if they are using the invasion of Ukraine to make more money. They are expected to respond that markets determine the price of gas.

Deutsche Bank is making a big call for a recession. Analysts at the bank said the Fed’s fight against inflation would push the US economy into recession next year, becoming the first major bank to make this baseline forecast. “We no longer see the Fed making a soft landing,” analysts wrote in a report that excites Wall Street.

JetBlue makes a game for Spirit Airlines. JetBlue’s $ 3.6 billion offer threatens the budget airline’s merger plan with Frontier in February. The JetBlue offer costs more than Frontier’s, but analysts said merging with Frontier may be more appropriate. Any combination will certainly face antitrust control.

President Biden is suspending federal student loan payments until September. This will be the sixth such extension since the beginning of the pandemic. The delay comes less than a month before payments are scheduled to restart.

Executives left WarnerMedia before merging with Discovery. Jason Killar, CEO of WarnerMedia, and Ann Sarnoff, CEO of WarnerMedia Studios and Networks Group, are stepping down. Killar focused on bringing the HBO Max streaming service to a solid footing, while Sarnoff helped tear down the walls between the company’s many divisions.

Twitter announced yesterday that it would add Elon Musk, the billionaire leader of Tesla and SpaceX, to its board of directors. The appointment came after weeks of talks initiated by Musk about the company’s future, and a day after Musk revealed that he had bought a 9.2% stake in Twitter, making him the company’s largest shareholder.

As part of the deal, Musk could not buy more than 14.9% of Twitter’s shares, interrupting talks that he could make a takeover bid. But it will still have a big impact on Twitter’s strategy, and investors look excited: Twitter’s shares have risen about 30 percent in the past two days.

For Twitter, the appointment of Musk could lead to a change in the way the service works. Twitter, along with competitors such as Facebook and TikTok, has grown by using algorithms to decide what users see. Musk’s vision is to hand over control to consumers by giving them the tools to adjust their emissions as they see fit. Jack Dorsey, who stepped down as Twitter’s chief executive in November, also advocated for the “decentralization” of the social network.

This can be risky. Decentralized Twitter would probably be a freer platform, with implications for content moderation, misinformation, and other issues that social media struggles with. Musk’s free tweets can also have consequences when he becomes an insider on Twitter. “Given Musk’s propensity to say or tweet news-worthy things, he could be in trouble for himself or on Twitter,” James Angel, a finance professor at Georgetown Business School, told DealBook. “Elon Musk’s SEC department will have fun with this.”

  • In 2018, Musk settled with the SEC and paid a fine for his on-market tweet to buy Tesla, which was not as likely as he thought. Since then, his tweets about the company have had to be checked by lawyers. He is now trying to terminate the agreement in court.

And Musk doesn’t have a few jobs anymore? Some research shows that CEOs and their companies benefit when their leaders work on external boards (but not too much). The position on Twitter would be the only appointment of Musk off board, but he has many leadership positions (Tesla, SpaceX, Neuralink and Boring Company). Last month, when it was announced that Musk would retire from the Endeavor board, a spokesman for the talent agency noted his full plate: “We know he has a lot of requirements and little time and we appreciate the support he has given us. ”


– Lael Brainard, Fed Governor and nominated by President Biden as Vice President of the Central Bank, in speech yesterday. Investors accepted her remarks, along with similar statements from other Fed officials, as a sign of the speed of aggression increases to come.

The annual Bitcoin conference in Miami begins today, bringing about 30,000 cryptocurrency fans to a city whose mayor presents it as a global crypto center. Miami Mayor Francis Suarez is vying with New York Mayor Eric Adams to attract crypto companies, both of whom recently converted their salaries into digital currency to show support for the industry.

This morning, Suarez raised the stakes, DealBook was the first to report, chairing the unveiling of an 11-foot and 3,000-pound bull statue, reminiscent of the iconic Wall Street piece but updated with “laser eyes” that crypto enthusiasts sometimes prefer on social media. “The future of finance is in Miami,” Suarez told DealBook in a statement. “The bull from Miami is a physical presentation of our city’s commitment to strengthening our position in the global financial market, especially in the development and adoption of cryptocurrencies. “

Miami’s crypto ambitions are big, and so far, Suarez’s plan seems to be working, thanks in part to low taxes in Florida, good weather, and easing restrictions during the pandemic. Venture capital investment in crypto companies in the Miami area rose to $ 745 million in 2021 from $ 6 million in 2020, according to PitchBook. But that’s still far below San Francisco and New York, where crypto companies raised $ 7.4 billion and $ 4.7 billion last year, respectively.

For that bull… Miami Bull was commissioned by TradeStation, a South Florida company that manufactures trading platforms, and was created by advertising and branding agencies working with the artist and studio. It is made of blended resin, “a unique futuristic material that is a symbol of the progress of the future of finance,” according to its creators. The statue will live on the campus of Miami Dade College.

Russian-Ukrainian war

  • Russia said foreign banks refused to process payments on $ 649 million in bonds, so instead sent rubles through local banks. New restrictions on the Russian government’s access to dollars for bond payments are bringing it closer to bankruptcy. (Bloomberg, NY)

  • “Why Tracking Putin’s Wealth Is So Difficult” (NYT)

  • Chanel will stop selling its products to people who intend to use them in Russia; Intel has suspended operations in Russia; and Twitter limits the reach of Russian government accounts. (BBC, Reuters, NYT)

  • For the latest developments, check out The Times’ live blog and updated maps

Transactions

  • Amazon is buying dozens of rocket launches to deploy its high-speed satellite Internet service. (Bloomberg)

  • HSBC has increased its stake in its Chinese securities joint venture, taking almost complete control of the mainland operation. (WSJ)

  • The cryptocurrency exchange FTX bought a “significant” stake in IEX, the stock exchange famous for its book “Flash Boys”. (Bloomberg)

  • A businessman who pulled out ads in newspapers advertising a fake $ 13.8 billion bid for defense company Textron has been charged with criminal and civil charges. (Reuters)

politics

  • In a lawsuit against Amazon, the SEC said the technology giant’s shareholders could table a resolution calling on the company to provide greater tax notices to the vote. (FT)

  • How billionaires make their money is talked about in Washington. (NYT Magazine)

  • The SEC said some officials in its law enforcement department had gained unauthorized access to documents prepared for cases heard by the agency’s internal court. (WSJ)

The best of the rest

  • Goldman Sachs had a record number of internship applications, and the admission rate was just over 1%. (CNBC)

  • The White House is still waiting for new Air Force One planes after Boeing’s crashes. (WSJ)

  • Howard Schultz has promised to include Starbucks in the NFT business before the end of the year. (inside information)

  • “You’re still being watched on the Internet, only in a different way” (NYT)

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