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Italian authorities have arrested a Chinese citizen suspected of being linked to a state-sponsored hacking group that sought to steal Covid-19 vaccine secrets from the US at the height of the pandemic in 2020.

Xu Zewei was arrested at Milan’s Malpensa airport on July 3 after an international warrant was issued by the US, Italian police confirmed.

The 33-year-old Chinese national was suspected of being linked to a Chinese government-backed hacking group known as Hafnium that was accused of penetrating Microsoft email software in 2021 in a mass espionage campaign, a person familiar with the matter said.

A nine-count US indictment accusing Xu of participating in a hack targeting US research into Covid vaccines was forthcoming, the person said.

Xu, currently being held at an Italian jail not far from the airport, was expected to be charged with carrying out computer intrusions between February 2020 and June 2021, the person added.

Italy’s ministry of justice confirmed Rome had received a US formal extradition request for Xu.

The US Department of Justice declined to comment. An Italian defence lawyer for Xu, whose extradition proceedings were expected to begin in a Milan court on Tuesday, did not respond to multiple requests for comment.

The arrest of the Chinese national, who claimed to be an IT specialist, could prove diplomatically awkward for Prime Minister Giorgia Meloni’s government, which is squeezed between Washington and Beijing.

Meloni has worked to forge a solid personal relationship with President Donald Trump, and continues to see the US as Italy’s most important ally, despite Washington’s tensions with the EU.

But she has also sought to maintain friendly diplomatic relations with Beijing, despite her decision to withdraw from Chinese President Xi Jinping’s flagship Belt and Road Initiative. Italy’s deputy prime minister, Matteo Salvini, was due to arrive in Beijing for an official visit later this week.

At the height of the Covid pandemic, the FBI and the US Cybersecurity and Infrastructure Security Agency repeatedly accused Beijing of attempting to steal vital coronavirus research by hacking into the computer systems of US groups studying the virus.

In the summer of 2020, the DoJ indicted two other Chinese nationals for allegedly attempting to access US research as part of a decade-long scheme to steal US trade secrets.

Beijing has consistently denied the US claims, saying at the time that China was at the forefront of the global race for Covid vaccines and had no need of help from the west.

Italy has a patchy record of handling extradition requests.

In early January, an Italian court ‘revoked” the arrest of an Iranian engineer sought by US authorities for allegedly illegally exporting sensitive high-tech technology to Iran, just days after Tehran freed a young Italian journalist.

Ahead of the carefully choreographed prisoner exchange, Meloni flew to Trump’s Mar-a-Lago resort to meet the president, who had not yet been sworn in.

In 2023, Artem Uss, a prominent Russian businessman wanted in the US for money-laundering and sanctions evasion escaped house arrest in Italy a day after an Italian court approved his extradition. He later reappeared in Russia.

Meloni’s government subsequently blamed the court for the escape, suggesting Uss had been treated too leniently by being granted house arrest.

Additional reporting by Giuliana Ricozzi in Rome

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Fox Corporation has been riding on a ratings high since Donald Trump’s re-election in November. Shares in the conglomerate — now primarily a news and sports media company after Disney bought out its film and television entertainment assets — are up 63 per cent over the past 12 months. That handily tops the gains at Comcast and Warner Bros Discovery, the parent company of rival cable news networks MSNBC and CNN. But a more fragmented and competitive media landscape also means a second Trump administration could be a double-edged sword.

Fox News, the company’s crown jewel, was the most watched cable TV channel in 2024, according to Nielsen ratings. It averaged 2.4mn viewers during the primetime hours of 8pm-11pm, a 30 per cent year-on-year increase. The audience surge has continued post-election, with the channel averaging 2.8mn viewers in June, a 23 per cent jump compared with the same period the year before. By contrast, MSNBC, which averaged 955,000 viewers and CNN, averaging 642,000 viewers, both recorded declines in viewership.

Advertisers have followed. Fox News has attracted 125 new blue-chip advertisers — including Amazon, JPMorgan and Netflix — since the US election. For the March quarter, the company pulled in more than $2bn in advertising revenue, a 65 per cent jump from the same period last year. Analysts at Bernstein reckon the figure could exceed $6.5bn for the full financial year that ended in June, up from $5.4bn the previous year.

Fox’s challenge is to turn a bump into a durable ascent. At a market capitalisation of $19bn, the company now trades at 13.5 times forward earnings — well above its three- and five-year averages. But for the years between Trump’s two presidential terms, the shares largely traded sideways. A flurry of executive orders and divisive policies keep the administration in the news, but Fox can’t rely on the current White House occupant forever.

That means reckoning with two trends. First, traditional sources of information — TV and newspaper — have seen their influences steadily chipped away by independent journalists, podcasters, social media influencers and content creators. So although Fox may dominate cable news, many people — especially younger viewers — are turning to other right-leaning sources, including podcaster Joe Rogan and upstart channels such as Newsmax and One America News Network.

Perhaps the biggest test will be digital. Fox plans to launch a direct-to-consumer subscription streaming service. Details are scant for now. But attempts by traditional media companies and Big Tech to break into video streaming have been mixed — and expensive. Comcast’s Peacock streaming service racked up $20.7bn in operating costs and expenses between 2020 and 2024. Disney’s direct to consumer streaming services took five years to turn a profit. Trump has given Fox a fillip; it will have to do the next bit on its own.

pan.yuk@ft.com

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Violent encounters between police and US residents claim about 2,000 lives a year. Axon Enterprise claims it has a way to reduce the frequency of such tragedies: by selling “neuromuscular incapacitation” devices to law enforcement. Readers might know these by their brand name: tasers. Thanks to their growing use, Axon has become one of the better performing stocks on the US market.

Shares in the Arizona-based group are up more than sevenfold since the start of 2020, vastly outpacing companies such as Meta Platforms and Apple, and giving Axon a market capitalisation of $62bn. Other stocks linked to law and order have also risen since Donald Trump’s election, such as private prison operator Geo Group and surveillance software maker Palantir. Axon now trades at more than 20 times estimated revenue for this year, its top line growing at 30 per cent annually.

That multiple is partly justified by a pivot from hardware to software. Axon also makes police body cameras that deliver video feeds back to the precinct. Some of its subscriptions create automated transcripts of encounters between police and citizens, cutting time spent on paperwork. Non-lethal force and video monitoring, it says, together contribute to more accountable law enforcement.

Software subscriptions are often seen as “sticky” — and therefore attract high valuations from investors — because customers tend to be loath to cancel or switch suppliers, even, in this case, with stretched police budgets and the occasional call to “defund the police”. The company says its total addressable market — an aspirational measurement popular with growth companies — is about $130bn, or more than 40 times its revenue at present.

One challenge will be to secure a place in institutional portfolios, which means overcoming potential queasiness about a product which, after all, inflicts pain. Axon does have some elite credentials: its chief financial officer came from KKR; its revenue and product officers from Amazon. Its board includes Caitlin Kalinowski, a former Meta Platforms executive now building robots and hardware for OpenAI.

Still, there is work to do. In 2022, nine members of Axon’s artificial intelligence ethics board resigned after the company disregarded advice about piloting a “taser-equipped drone” initiative. And the hardware component of the business still remains important, and may be too edgy for some. Consider the “Taser 10” model equipped with a range of 45 feet, and 10 shots that can pierce “dense clothing”.

Axon’s gross margin of about 60 per cent shows there’s substantial profit to be had from providing innovative gadgets to law enforcement agencies. Last week’s US budget bill, which allocated $165bn to the Department of Homeland Security, shows how much there is at stake. For investors who can get comfortable with that — and with the fact that the company ultimately has limited control over how, and on whom, its tools are used in the field — Axon is undoubtedly a stock for the times.

sujeet.indap@ft.com