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Good morning and welcome back to FirstFT Americas. Here’s what we’re covering today:
Auditors launch AI assurance services
OECD warns of threat to global growth
Carney promises ‘grand bargain’ with Canada’s oil industry
Big Read on the future of the private equity industry
The Big Four accountancy firms are racing to create a new type of audit that verifies the effectiveness of artificial intelligence tools as the companies seek to profit from clients’ demand for proof that their AI systems work and are safe.
Auditing AI: Deloitte, EY and PwC told the Financial Times that they were preparing to launch AI assurance services as they hope to use reputations gained in financial audits to win work assessing whether AI systems, such as those in self-driving cars and cancer-detecting programmes, perform as intended.
The context: The audits would open another revenue stream for auditors, similar to when the firms cashed in on the trend for companies to buy assurance for their environmental, social and governance metrics. The move comes as some insurers have begun offering cover for losses caused by malfunctioning AI tools such as customer service chatbots. Ellesheva Kissin has the exclusive story.
Warning from AI “godfather”: Yoshua Bengio says the latest models are displaying dangerous characteristics such as lying to users.
xAI seeks $113bn valuation: Elon Musk returns to business with a new share sale for his AI start up.
Here’s what else we’re keeping tabs on today:
Economic data: The US publishes April job openings and factory orders data while Brazil’s statistics agency publishes industrial output data for the same month.
Results: Dollar General and Hewlett Packard Enterprise report earnings.
Harvey Weinstein trial: Lawyers are set to make their closing arguments in the movie mogul’s retrial on rape and sexual assault charges.
South Korea: Voters go to the polls in a pivotal election after the former president was removed over his attempt to impose military rule.
Five more top stories
1. The global economy is heading into its weakest growth spell since the Covid-19 slump as President Donald Trump’s trade war saps momentum in leading economies including the US, OECD forecasts showed. The organisation slashed its outlook for global output and the majority of the G20 leading economies. Read more on the OECD’s new growth projections.
2. Far-right leader Geert Wilders has quit the Dutch government, plunging the country into political uncertainty. Wilders, whose Freedom party was the biggest in a four-party coalition, said he could no longer support its failure to crack down on asylum applications.
3. Israeli soldiers have killed more than two dozen Palestinians near an aid centre in Gaza, the local health ministry said, the latest in a string of deadly incidents since a controversial US-backed aid scheme was introduced in the enclave last week. Follow this developing story.
4. Private credit is now so intertwined with big banks and insurers that it could become a “locus of contagion” in the next financial crisis, a group of economists, bankers and US officials has warned. The report is one of the most comprehensive analyses to date on how private credit would affect the broader financial system during a period of market upheaval.
5. Mark Carney has vowed to work with Canada’s oil industry on a “grand bargain” to boost production and reduce emissions after a meeting with senior oil industry executives in recent days. The overture to the oil sector, a key driver of Canada’s economy, marks a shift for Carney.
The Big Read
The difference among private equity’s Big Three is becoming stark in terms of their business models. Blackstone is sticking to a traditional fee-based approach, while rivals Apollo and KKR embrace an insurance-powered model that provides long-term funding but comes with bank-like risks. Which version will prevail?
We’re also reading . . .
Larry Fink: The first draft of globalisation created enormous wealth that was unevenly distributed, argues the chief executive of BlackRock. It’s time for the second draft.
‘Taco trade’: Trump always chickens out on foreign policy too, writes Gideon Rachman.
Vibe coding: Creating apps using large language models may go the same way as DIY, with some people enjoying success while others rue their very costly mistakes, writes Sarah O’Connor.
Poland: The country’s ruling coalition is bracing itself for a confidence vote after Donald Tusk’s party suffered a bruising defeat in the presidential race.
Chart of the day
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Walmart is the US’s biggest private sector employer and while sales and profits are rising the number of employees is not. In the past five years Walmart’s workforce shrunk by 70,000 even as revenues expanded by $150bn. Walmart’s payroll trend stands in contrast to its peers. Here’s why.
Take a break from the news
As the industry faces falling demand, Oyster Yachts has found a novel way to build orders. The UK maker of luxury “blue water” sailing boats offers its 1,200 owners a mid-life challenge and a collective thrill by helping them to sail around the world together, writes John Gapper.
