Koch Industries bet on batteries

Charles Koch — chief executive of Koch Industries, the sprawling energy and commodities group — has funded conservative groups that raise skepticism about climate change, part of the significant political influence wielded by his family’s fortune. Over the past few years, Koch has also been a major investor in batteries – a key technology in the global effort to reduce carbon emissions.

One arm of Koch Industries is betting that the fast-growing electric car industry will generate huge demand for better batteries. Its investments include 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’s strategic platforms are investing $30 million in Blue Current, which it will use to build a beta program and bring it to production, DealBook is the first to report.

“We’re going to need a lot of batteries,” Elon Musk said last year at a Tesla event. Wood Mackenzie estimates that 18 percent of new cars sold will be electric by 2030, far exceeding current battery production. Battery manufacturing is dominated by companies like Tesla, Panasonic, and LG Chem, but new players are emerging. Venture investors in the United States invested $1.8 billion in the industry in 2021, significantly more than in any previous year, according to PitchBook.

DeSimone Blue Current helped drive participation. Named in more than 200 patents, he left a long academic career in the sciences at the University of North Carolina at Chapel Hill and North Carolina State University to co-found Carbon, a 3D manufacturing company, in 2013. (The company raised $680 million from Private funding.) DeSimone stepped down as CEO in 2019, to become its board chair, and joined the faculty at Stanford University the following year. Since then, Silicon Valley has been wondering: what next?

Blue Current has been in stealth mode since 2016, When DeSimone founded it with Nitash Balsara, a professor at UC Berkeley. The company is betting on solid-state silicon as a technology superior to lithium-based batteries and highly flammable liquid electrolytes. Battery fires are a real problem for electric cars: Last year, General Motors had to replace lithium-ion battery units in 141,000 cars after some of them caught fire. Solid-state batteries that use lithium or silicon are the next big thing for investors, but Blue Current says its silicon-based batteries are safer and have an especially high energy density, which means more charge in a smaller space.

No two batteries are “ready for prime time yet,” said Venkat Srinivasan, director of the Arjun National Laboratory’s Collaborative Center for Energy Storage Science, which has not conducted a direct evaluation of 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 fresh money from a high-profile investor to prove itself.

Oil executives face questioning over rising gas prices. At today’s congressional hearing, the leaders of Exxon, Chevron and other energy companies will likely be asked whether they are taking advantage of the invasion of Ukraine to make more money. They are expected to respond by saying that the market determines the price of gas.

Deutsche Bank launches a big call for recession. Analysts at the bank said the Federal Reserve’s fight against inflation will push the US economy into recession next year, becoming the first major bank to issue these key forecasts. “We no longer see the Fed make a soft landing,” analysts wrote in a report making waves on Wall Street.

JetBlue presents a play for Spirit Airlines. JetBlue’s $3.6 billion bid threatens the budget airline’s merger plan with Frontier, which was agreed in February. JetBlue’s offer is worth more than Frontier’s, but analysts have said a merger with Frontier may be more appropriate. Either mix is ​​sure to face close antitrust scrutiny.

President Biden is halting federal student loan payments through September. It will be the sixth such extension since the start of the epidemic. The delay comes less than a month before payments are scheduled for the restart.

Executives leave WarnerMedia prior to its merger with Discovery. Jason Keeler, president of WarnerMedia, and Ann Sarnoff, CEO of WarnerMedia Studios and Networks Group, are stepping down. Keelar focused on getting his streaming service HBO Max onto firm ground, while Sarnoff helped break down walls between the company’s many divisions.

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

As part of the agreement, Musk can buy no more than 14.9% of Twitter’s stock, cutting off talk that he might make a takeover offer. But he will still have a great deal of influence over Twitter’s strategy, and investors seem excited: Twitter’s stock is up nearly 30 percent over the past two days.

For Twitter, hiring Musk could change the way its service operates. Twitter has grown, along with competitors like Facebook and TikTok, using algorithms to determine what users see. Musk’s vision is to hand control over to users, giving them the tools to customize their feeds as they see fit. Jack Dorsey, who stepped down as Twitter’s CEO in November, has also argued for the “decentralization” of the social network.

This may be risky. Decentralized Twitter is likely to be a freer platform, with implications for moderating content, misinformation, and other issues that social networks grapple with. Musk’s free tweets can also have repercussions when he becomes an internal Twitter user. “Given Musk’s tendency to say or tweet things of news interest, he could get himself or Twitter in trouble,” James Engel, professor of finance at Georgetown University School of Business, told DealBook. “The Elon Musk division of the SEC will have fun with this.”

  • In 2018, Musk settled with the Securities and Exchange Commission and was fined for a market-influencing tweet about a Tesla purchase that wasn’t as likely as he had suggested. Since then, his tweets about the company must be vetted by lawyers. He is now trying to terminate this agreement in court.

Doesn’t Musk already have several jobs? Some research shows that CEOs and their companies benefit when their leaders serve on external boards (but not too many boards). The Twitter position will be Musk’s only external appointment to the board, but he has plenty of executive positions (Tesla, SpaceX, Neuralink, The Boring Company). Last month, when Musk’s resignation from Endeavor’s board of directors was announced, a spokesperson for the talent agency cited his full description: “We know he has a lot of demands and little time, and we appreciate the support he’s given us.”


– Lyle Brainard, Federal Reserve Governor and President Biden’s nominee for central bank vice president, in a letter yesterday. Investors took her comments, along with similar statements from other Federal Reserve officials, as evidence of Aggression rate increases to come.

The annual Bitcoin Conference begins in Miami today, bringing about 30,000 crypto enthusiasts to a city that the mayor has portrayed as a global hub for cryptocurrency. Miami Mayor Francis Suarez is competing with New York City 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 ups the ante, the DealBook is first to report, presiding over the unveiling of an 11-foot-tall, 3,000-pound statue of a charging bull, reminiscent of the famous Wall Street piece but updated with the “laser eyes” that crypto enthusiasts sometimes prefer over the medium Social Media. “The future of finance is in Miami,” Suarez told DealBook in a statement. “Miami Bowl It is a physical representation of our city’s commitment to strengthening our position in the global financial market, particularly in the advancement and adoption of cryptocurrencies.”

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

About this bull… The Miami Bull is commissioned by TradeStation, a South Florida company that makes trading platforms, and created by advertising agencies and brands that work with an artist and studio. It is made of a resin mixture, “a unique, futuristic material, which is a symbol of the advancement of the future of finance,” according to its creators. The statue will live on the campus of Miami-Dade College.

Russia and Ukraine war

  • Russia said foreign banks refused to process the $649 million bond repayment, so it sent rubles through local banks instead. New restrictions on the Russian government’s access to dollars to repay bonds are pushing it closer to default. (Bloomberg, New York Times)

  • “Why Tracking Putin’s Wealth Is So Difficult” (The New York Times)

  • Chanel will stop selling its products to people who intend to use them in Russia; Intel suspended operations in Russia; Twitter limits access to Russian state-run accounts. (BBC, Reuters and The New York Times)

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

deals

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

  • HSBC has increased its stake in its Chinese securities joint venture, and has almost completely controlled mainland operations. (The Wall Street Journal)

  • Crypto exchange FTX has bought a “significant” stake in IEX, the exchange made famous by the “Flash Boys” book. (Bloomberg)

  • A businessman who posted newspaper ads promoting a $13.8 billion fake bid for Textron Defense Company has been subjected to criminal and civil charges. (Reuters)

Policy

  • In a ruling against Amazon, the SEC said shareholders of the tech giant could bring to a vote a resolution calling for the company to submit larger tax disclosures. (Presented)

  • How billionaires make their money talking in Washington. (New York Times Magazine)

  • The Securities and Exchange Commission said some employees in the enforcement division improperly obtained documents prepared for cases heard by the agency’s internal court. (The Wall Street Journal)

The best of the rest

  • Goldman Sachs has had a record number of internship applications, and its acceptance rate is just over 1 percent. (CNBC)

  • The White House is still waiting for the new Air Force One after the unfortunate production accidents at Boeing. (The Wall Street Journal)

  • Howard Schultz has pledged to get Starbucks into the NFT business before the end of the year. (inside)

  • “You’re Still Being Tracked On The Internet, In A Totally Different Way” (The New York Times)

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