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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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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

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CoreWeave has struck a $9bn deal to acquire its rival Core Scientific, in a transaction set to eliminate $10bn of expensive lease costs for the artificial intelligence data centre operator.

CoreWeave announced on Monday that it was acquiring Core Scientific in an all-stock transaction, capitalising on a rally in its share price to seal a deal that will hand the latter company a stake of less than 10 per cent in the overall business.

The New Jersey-based group said the deal valued its competitor’s shares at about $9bn, significantly higher than a previous takeover attempt last year that Core Scientific then rebuffed as “significantly” undervaluing its shares.

After that aborted takeover, CoreWeave struck billions of dollars of long-dated lease transactions with its Delaware-based rival, under which it rented out Core Scientific’s high-performance data centres in order to power the AI computing needs of its customers.

“Owning Core Scientific’s high-performance data centre infrastructure enables us to significantly enhance operational efficiencies and de-risk our future expansion,” CoreWeave’s chief executive Michael Intrator told analysts and investors on Monday, adding that the deal would help its customers “to unleash the full potential of artificial intelligence”.

Core Scientific’s shares fell as much as 20 per cent on Monday — having rallied last month on a Wall Street Journal report of a potential takeover — while CoreWeave’s shares slipped nearly 5 per cent.

Core Scientific shareholders will receive 0.1235 of newly issued CoreWeave shares if the deal closes as planned in the fourth quarter of 2025. This fixed ratio means Core Scientific shareholders bear the risk of a CoreWeave share-price slide devaluing the transaction.

“The price appears low,” Cantor analysts wrote in a note, adding that the agreed share price for the takeover was only about 10 per cent higher than Core Scientific’s record high in November. “The implied acquisition multiple is too low, we are a bit underwhelmed with the agreed takeout price,” they wrote.

CoreWeave buys cutting-edge graphical processing units from Nvidia — which is also a shareholder and one of its biggest customers — and rents them out to large tech companies to power their AI usage.

While CoreWeave had a rocky reception when it floated its shares in March — scaling back both the size and valuation of its initial public offering — its shares have since rallied nearly 300 per cent. CoreWeave’s market capitalisation is currently about $75bn.

CoreWeave’s underwhelming debut was largely driven by concerns over its substantial debts and financial complexity, driven in part by the long-dated and expensive nature of its lease liabilities with Core Scientific.

The new deal could allay some of those concerns. CoreWeave claimed that the transaction would “eliminate” $10bn of lease costs and estimated that it could achieve $500mn of annual cost savings by 2027.

Both CoreWeave and Core Scientific began as cryptocurrency miners, but have pivoted to focusing on AI as demand for vast computing power and large data centres soars.

While the two companies share similar names and a history in the bitcoin mining space, they have operated as separate businesses until now.

Darin Feinstein, a former nightclub owner and noted cryptocurrency enthusiast, co-founded Core Scientific in 2017 to provide data centre capacity for computer-intensive bitcoin mining companies.

The company filed for Chapter 11 bankruptcy protection in 2022, when a cryptocurrency crash roiled its biggest customers, and Feinstein stepped down as group co-chair in 2023.

Crypto miners run powerful computing sites where they solve complex mathematical puzzles in order to authenticate transactions and produce digital coins. These data centres are in high demand because the powerful graphics processing chips are used in both crypto mining and AI processing, while large computing facilities are expensive to build from scratch.

CoreWeave said Monday’s deal would gave it the “potential to repurpose or divest” Core Scientific’s crypto mining business “over the medium-term horizon”.

Intrator further underscored the pivot away from crypto, telling investors: “We are not looking to expand our footprint into cryptocurrencies.”