Big Donors Rally Around Nikki Haley

A bipartisan boost for Haley

As the four remaining prominent Republican presidential contenders not named Donald Trump assemble for the latest G.O.P. primary debate tonight, just one will arrive with any sort of positive momentum.

Nikki Haley is gaining traction as the leading anti-Trump Republican, particularly among Democrats and business-minded conservatives alike. But growing support from elites may not be enough to help her catch the former president.

Reid Hoffman recently donated $250,000 to a super PAC supporting Haley. The LinkedIn co-founder and a major Democratic donor has funded an array of anti-Trump initiatives. His donation, first reported by The Times, is the latest sign that some Democrats see bolstering Haley as the best way to beat Trump.

News of Hoffman’s contribution came after Jamie Dimon, JPMorgan Chase’s C.E.O., urged liberals to back Haley. “Get a choice on the Republican side that might be better than Trump,” he said at the DealBook Summit last week.

That’s on top of growing support from business-minded Republicans. The political network founded by Charles and David Koch recently endorsed Haley, and deep-pocketed donors including Stanley Druckenmiller and Andy Sabin have attended fund-raising events for her.

A reality check: Despite skipping all of the Republican primary debates and facing a staggering array of criminal and civil trials, Trump still leads Haley and the rest of the G.O.P. field in polls.

And support from Democrats and corporate moguls may not endear Haley to the Republican base that will start voting on the G.O.P. candidate next month: A recent fund-raising email from Trump argued that “globalist special interest donors from both parties” are forging “an unholy alliance to beat us.”

Other Republican contenders are faring even worse. The campaign of Ron DeSantis, Florida’s governor, is in turmoil. Chris Christie, the former New Jersey governor, barely qualified for the debate and faces calls to drop out to avoid fracturing the anti-Trump opposition. And Vivek Ramaswamy, the outspoken “anti-woke” entrepreneur, is fading in the polls.

Some donors are just throwing up their hands. Marc Rowan, the C.E.O. of Apollo Global Management, said that the 2024 race would come down to President Biden and Trump. “Personally, I’m disappointed,” he told Bloomberg on Tuesday.

• In other 2024 news: Liz Cheney, the former Wyoming representative who vehemently opposes Trump, is weighing a third-party presidential run. And Biden said “I’m not sure I’d be running” for re-election were Trump not in the race for the White House.

HERE’S WHAT’S HAPPENING

The Supreme Court appears wary of broadly disrupting the U.S. tax code. In oral arguments for Moore v. United States, a majority of justices seemed to favor narrowly upholding a Trump-era one-time tax on foreign income. Legal experts warned that a broad ruling could lead to a redefinition of income, potentially requiring major portions of American tax law to be rewritten.

CVS will change how its pharmacies are paid for drugs. The nation’s biggest pharmacy chain said it would move to a system based on how much it pays for medicines, rather than the current model that involves complex formulas. CVS said the new arrangement would give more insight into drug pricing, but skeptics argued that it may not lead to lower costs for consumers.

The N.C.A.A.’s president proposes uncapped compensation for college athletes. Charlie Baker suggested that top schools set aside educational trust funds of a minimum of $30,000 annually for at least half of their athletes, and raise compensation for women. The plan — which would take a long time to put in effect — is aimed at helping protect the N.C.A.A. from antitrust inquiries.

Patrick McHenry, the chair of the House Financial Services Committee, will retire. The North Carolina Republican, the first interim speaker and a champion of the crypto industry, said he wouldn’t seek re-election. Because of term limits, he wouldn’t be able to hold onto his chairmanship anyway, though his district will most likely remain in Republican hands.

Bank bosses head to the Hill

The heads of America’s biggest banks, including Jamie Dimon of JPMorgan Chase and David Solomon of Goldman Sachs, are expected to go on the offensive on Wednesday at a Senate Banking Committee hearing, arguing that new regulation would help create further instability in the sector and harm borrowers.

Capital rules will be in focus. Industry lobbying groups have pushed back in recent months against the so-called Basel III Endgame that would require banks to keep billions on their books as a backstop for potential losses. (Basel refers to the international banking standards committee.) The Fed and the Federal Deposit Insurance Corporation are among the regulators seeking higher capital requirements after the regional banking crisis set off by the collapse of Silicon Valley Bank.

The hearing may be the bankers’ last best chance to push their case that the Basel proposal should be watered down or scrapped. In prepared remarks, Dimon said the proposal “would unjustifiably and unnecessarily increase capital requirements by 20-25 percent for the largest banks.” That would force lenders to pull back, creating “a harmful ripple effect on the economy, markets, businesses of all sizes and American households,” he said.

The proposal would have an inflationary side effect, driving up the cost of credit for its clients, Solomon warned in his prepared remarks, which in turn “will likely get passed on to consumers.”

The pushback comes as America’s lenders contend with a slew of challenges. High interest rates and a slowing economy have put the crimp on their core lending business. Banking watchdogs, meanwhile, remain concerned about lenders’ exposure to the pandemic-hit commercial real estate sector.

Don’t expect progressive senators to be swayed. In a statement, the committee wrote that “while Wall Street banks argue that stronger rules to protect the public will be too expensive, they are actually making trillions of dollars in profits every year and paying C.E.O.s several hundred times more than their median workers.”

Europe races to regulate A.I.

The first big regulatory regime for artificial intelligence could be signed as early as Wednesday, with European Union lawmakers in the final stages of debating the A.I. Act. The rules wouldn’t take effect for 18 months, but they represent an effort by governments to catch up with the development of a transformative technology that has exploded into the public consciousness since the introduction of ChatGPT a year ago.

Europe has long been one of the most aggressive tech regulators. From data privacy to tech sector M&A, the E.U. has often been ahead of others. But the fast pace of A.I. development is testing regulators’ ability to keep up. The A.I. Act was introduced in 2021, but the tech has advanced significantly during that time.

Other governments are deliberating their own rules. President Biden issued an executive order in October focused on A.I. and national security; Japan is drafting nonbinding guidelines for the technology and China has imposed restrictions on certain types of A.I. Last month, Britain hosted an A.I. safety summit for tech leaders and policymakers that included the U.S. and China.

E.U. lawmakers are trying to impose guardrails without killing innovation. Some say the rules need to address the underlying technology, and are pushing to stop the use of A.I. in biometric surveillance.

But some member states want opt-out options. Last month, France, Germany and Italy came out against strict regulation of general-purpose A.I. models for fear of hurting domestic start-ups. Some member states also want exceptions for national security, defense and military purposes.

The latest draft of the A.I. Act focuses on “high risk” uses, including law enforcement, school admissions and hiring. Some applications, like chatbots and software that creates manipulated images, will have to make clear to people that they are A.I.-generated.

Congress takes on campus battles

The presidents of Harvard, M.I.T. and the University of Pennsylvania faced a congressional grilling on Tuesday over a growing wave of hate speech and antisemitism on their campuses that has angered some business leaders and prominent donors since the war in Gaza began in October.

College leaders admitted to difficulties in confronting hate and preserving free speech. “I know that I have not always gotten it right,” Claudine Gay, Harvard’s president, told the House Committee on Education and the Workforce. She has come under intense pressure from influential professors, graduates and donors, including the former Treasury secretary Larry Summers and Pershing Square Capital Management’s Bill Ackman, to do more to protect students.

After the hearing, Ackman called on all three to “resign in disgrace.” Summers said that Gay’s ideals were “just the right ones,” but that “there’s a lot of work to do.”

Preserving students’ safety and civil rights has become a national focus. The Education Department’s Office for Civil Rights recently opened an investigation into complaints of antisemitism at Harvard. That came after a series of federal civil rights investigations into complaints of discrimination against students at some of America’s most prestigious universities, including Harvard, Penn and Columbia. Some schools have formed new task forces to address the growing concerns.

The financial stakes are high. Schools that run afoul of civil rights laws could risk losing federal funding. Meanwhile, major university donors are using their clout to call attention to the rise of antisemitism on campus, pushing schools to do more to address the matter. These wealthy alumni are urging others to fight back, too.

“We have our own war here in the U.S.,” Marc Rowan, the C.E.O. of Apollo Global Management, said at a recent fund-raiser. Rowan, who has criticized his alma mater, Penn, for its handling of antisemitism, renewed his call to hold the institutions accountable, “financially or otherwise.”

THE SPEED READ

Deals

• Shares in British American Tobacco tumbled after the company announced a $31.5 billion write-down of its U.S. cigarette brands, six years after buying Reynolds American for $49 billion. (NYT)

• Elon Musk’s artificial intelligence start-up, xAI, filed to raise up to $1 billion in new capital. (The Verge)

• How Jeff Ubben’s second act, as an environmentally minded activist investor, fell apart. (FT)

Policy

• China’s leader, Xi Jinping, is conducting a purge of the top ranks of the country’s political system, a move that could have implications for the global economy and regional stability. (Politico)

• A group of nuns that owns a stake in Smith & Wesson sued the gun maker, arguing that its sales and marketing strategy for the AR-15 rifle is putting shareholders’ investments at risk. (WSJ)

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