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Disgraced Theranos founder Elizabeth Holmes has begun her prison sentence in Texas.

Holmes, 39, is due to spend the next 11 years behind bars for overseeing an infamous blood-testing hoax.

She entered the federal women’s prison camp located in Bryan, Texas on Tuesday, according to the Federal Bureau of Prisons.

The prison camp is a minimum-security facility that houses about 650 women, considered the lowest security risk.

Prison camps also often have minimal staffing and many of the people incarcerated there work at prison jobs.

Last year, a jury convicted Holmes on four felony counts of fraud and conspiracy. She was sentenced to prison time in November.

Holmes, had been on bail, living in the San Diego area.

She was put under investigation in 2017 for the collapse of Theranos, a start-up she founded after dropping out of Stanford University when she was just 19.

Theranos founder Elizabeth Holmes begins serving her prison sentence
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Holmes begins serving her prison sentence

Holmes became a Silicon Valley sensation when she promised that Theranos would revolutionise health care, thanks to a technology that could quickly scan for diseases and other problems with a few drops of blood taken with a finger prick.

Forbes dubbed Holmes the world’s youngest female self-made billionaire in 2014, when she was 30 and her stake in Theranos was worth $4.5bn.

Theranos raised nearly $1bn from investors, but it all blew up after The Wall Street Journal published a series of articles exposing serious flaws in Theranos’ technology.

Read more:
Elizabeth Holmes’s former partner Ramesh Balwani jailed
How Theranos founder went from billionaire darling of Silicon Valley to behind bars

While she was building up Theranos, Holmes grew closer to Ramesh, ‘Sunny’ Balwani, who would become her romantic partner as well as an investor and fellow executive in the Palo Alto, California, company.

Holmes and Balwani, who had been secretly living together while running Theranos, broke up after the Journal’s revelations and the company collapsed.

In 2018, the US Justice Department charged both with a litany of white-collar crimes in a case aimed at putting a stop to the Silicon Valley practice of overselling the capabilities of a still-developing technology – a technique that became known as “fake it ’til you make it”.

Holmes at federal court in San Jose, California last October. Pic: AP
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Holmes at federal court in San Jose, California last October. Pic: AP

Holmes admitted making mistakes at Theranos, but steadfastly denied committing crimes during seven days on the witness stand during her trial.

As she begins her sentence, Holmes leaves behind two young children – a son born in July 2021 a few weeks before the start of her trial and a three-month-old daughter.

Holmes met the children’s father, William ‘Billy’ Evans, in 2017 around the same time she was under investigation for the collapse of Theranos.

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TGI Fridays close to rescue deal with Breal and Calveton

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TGI Fridays close to rescue deal with Breal and Calveton

A rescue deal for the British operations of TGI Fridays which will salvage more than 2,000 jobs is on the verge of being finalised this weekend.

Sky News has learnt that Breal Capital and Calveton, which jointly own the upmarket restaurants business D&D London, could agree a deal to acquire the majority of TGI Fridays as early as Monday.

An announcement is likely to be made once the transaction is completed.

Sources said this weekend that a deal was expected to include between 50 and 55 of the chain’s 87 sites and at least 2,000 of its more than 3,000-strong workforce.

Final details were still being ironed out between the buyers and the administrators to the business, the sources added.

If completed, the deal would salvage the majority of the jobs at TGI Fridays but could still see in the region of 1,000 being lost.

Hostmore, the parent company, said last month that it was filing for administration but that this would have no impact on Thursdays, the trading subsidiary which owns the TGI Fridays UK franchise.

However, the operating business itself subsequently filed a notice of intention to appoint administrators.

Hostmore’s board blamed “a very challenging set of circumstances” for its collapse.

Breal and Calveton acquired D&D London – owner of the German Gymnasium and Quaglino’s restaurants – last year.

Their impending deal is understood to include the chain’s existing leases and the right to use the TGI Fridays brand in the UK.

The collapse of TGI Fridays’ UK parent comes less than six months after it struck a deal to reverse the US restaurant business of the same name into London-listed Hostmore.

That deal has since been abandoned.

Breal and Teneo declined to comment, while Calveton could not be reached for comment.

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Budget 2024: How fiscal rules are impeding long-term investments – and what Rachel Reeves can do about it

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Budget 2024: How fiscal rules are impeding long-term investments - and what Rachel Reeves can do about it

Before we get onto the budget and what Rachel Reeves might do to fiddle her fiscal rules and give herself a little more room to spend, I want you to ponder, for a moment, a recent report from the Office for Budget Responsibility (OBR).

This wasn’t one of those big OBR reports that get lots of attention – such as the documents and numbers it produces alongside each budget, full of the forecasts and analyses on the state of the economy and the public finances.

Instead, it was a chin-scratchy working paper that asked the question: if the government invests in something – say, a road or a railway, or a new school building – how long does it generally take for that investment to come good?

The answer, according to the report, was: actually quite a long time. Imagine the government spends a chunk of money – 1% of national income – on investment this year. In five years’ time that investment will only have created 0.4 per cent of GDP. In other words, in net terms, it’s costed us 0.6% of GDP.

But, and this is the important thing, look a little further off. A high-speed rail network is designed to last decades, and as those decades go on, it gradually improves people’s lives – think of the time saved by each commuter each day – small amounts each day, but they gradually mount up. So while the investment costs money in the short run, in the longer run, the benefits gradually mount.

The OBR’s calculation was that while a 1% of GDP public investment would only deliver 0.4% of GDP in five years, by the time 10 or 12 years had passed, the investment would be responsible for approaching 1% of GDP. In other words, it would have broken even. The money put in at the start would be fully earned back in benefits.

And by the time that investment was 50 years old, it would have delivered a whopping 2.5% of GDP in economic benefits. Future generations would benefit enormously – or so said the OBR’s sums.

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Having laid that out, I want you now to ponder the fiscal rules Rachel Reeves is confronted with at this, her first budget. Most pressingly, ponder the so-called debt rule, which insists that the chancellor must have the national debt – well, technically it’s “public sector net debt excluding Bank of England interventions” – falling within five years.

There is, it’s worth underlining at this point, nothing fundamental about this rule. Reeves inherited it from the Conservative Party, who only dreamed it up a few years ago, after COVID. Back before then, there have been countless rules that were supposed to prevent the national debt falling and, frankly, rarely ever succeeded.

But since Reeves wanted everyone to know, ahead of the election, just how serious Labour was about managing the public finances, she decided she would keep those Tory rules. One can understand the politics of this; the economics, less so – then again, I confess I’ve always been a bit sceptical about all these rules.

The upshot is, to meet this rule, she needs the national debt to be falling between the fourth and fifth year of the OBR’s five-year forecast. And according to the last OBR forecasts, which date back to Jeremy Hunt‘s last budget, it is. But not by much: only by £8.9bn. If that number rings a bell, it is because this is the much-vaunted, but not much understood, “headroom” figure a lot of people in Westminster like to drone on about.

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And – if you’re taking these rules very literally, which everyone in Westminster seems to be doing – then the takeaway is that the chancellor really doesn’t have much room left to spend in the coming budget. She only has £8.9bn extra leeway to borrow!

Every spending decision – whether on investment, on the NHS, on benefits or indeed on anything else, happens in the shadow of this terrifying £8.9bn headroom figure. And since the chancellor has already explained, in her “black hole” event earlier this year, that the Conservatives promised a lot of extra spending they hadn’t budgeted for – not, perhaps, the entire £22bn figure she likes to cite but still a fair chunk – then it stands to reason there’s really “no money left”.

Or is there? So far we’ve been taking the fiscal rules quite literally but at this stage it’s worth asking the question: why? First off, there’s nothing gospel about these rules. There’s no tablet of stone that says the national debt needs to be falling in five years’ time.

Ed Conway's graphs

Second, remember what we learned from that OBR paper. Sometimes investments in things can actually generate more money than they cost. Yet fixating on a debt rule means the money you borrow to fund those investments is always counted as a negative – not a positive. And since the debt rule only looks five years into the future, you only ever see the cost and not the breakeven point.

Third, the debt rule used by this government actually focuses on a measure of the national debt which might not necessarily be the right one. That might sound odd until you realise there are actually quite a few different ways of expressing the scale of UK national debt.

The measure we currently use excludes the Bank of England, which seemed, a few years ago, to be a sensible thing to do. The Bank has been engaged in a policy called quantitative easing which involves buying and selling lots of government debt – which distorts the national debt. Perhaps it’s best to exclude it.

Except that recently those Bank of England interventions have actually been serving to drive up losses for the state. I won’t go into it in depth here for risk of causing a headache, but the upshot is most economists think focusing on a debt measure which is mostly being affected right now not by government decisions but by the central bank reversing a monetary policy exercise seems pretty perverse.

In other words, there’s a very strong argument that instead of focusing on the ex-BoE measure of net debt, the fiscal rules should instead be focusing on the overall measure of net debt. And here’s the thing: when you look at that measure of net debt, lo and behold it’s falling more between year four and five. In other words, there’s considerably more headroom: just under £25bn rather than just under £9bn based on that other Bank-excluding measure of debt.

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Might Reeves declare, at the budget or in the run-up, that it makes far more sense to focus on overall PSND from now on? Quite plausibly. And while in one respect it’s a fiddle, in her defence it’s a fiddle from one silly rule to an ever so slightly less silly rule.

It would also mean she has more room to borrow to invest – if that’s what she chooses to do. But it doesn’t resolve the deeper issue: that both of these measures fixate on the short-term cost of debt without taking into account the long-term benefits of investment – back to that OBR paper.

If Reeves is determined to stick to the, some would say arbitrary, five-year deadline to get debt falling but wants to incorporate some measure of the benefits of investment, she could always choose one of two other measures for this rule.

She could focus on something called “public sector net financial liabilities” or “public sector net worth”. Both of these measures include some of the assets owned by the state as well as its debts – the upshot being that hopefully they reflect a little more of the benefits of investing more money.

The problem with these measures is they are subject to quite a lot of revision when, say, accountants change their opinion about the value of the national road or rail network. So some would argue these measures are prone to more volatility and fiddling than simple net debt.

Even so, these measures would dramatically transform the “headroom” picture. All of a sudden, Reeves would have over £60bn of headroom to play with. More than enough to splurge on loads of investments without breaking her fiscal rule.

Ed Conway's graphs

There’s one other change to the rule that would probably make more sense than any of the above: changing that five-year deadline to a 10 or even 15-year deadline. At that kind of horizon, a pound spent on a decent investment would suddenly look net positive for the economy rather than a drain.

Whether Reeves wants to do any of the above depends, ultimately, on how she wants to begin her term in office. Does she want to establish herself as a tough, fiscally conservative Chancellor – with a view, perhaps, to relaxing in later years? Or does she feel it’s more important to begin investing early, so some of the potential benefits might be obvious within a decade or so?

Really, there’s nothing in the economics to stop her choosing either path. Certainly not a set of fiscal rules which are riddled with flaws.

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UK risks losing AI leadership without data strategy, government warned

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UK risks losing AI leadership without data strategy, government warned

The UK needs a strategy to meet growing demand for data centres or risk losing its advantage in the race to develop artificial intelligence (AI), one of the sector’s largest players has told Sky News.

Data centres – warehouses housing processors that power cloud computing – are central to the digital economy. They provide the power, connections and security required for the vast amount of processing power on which everything from personal device browsing to AI learning relies.

The UK is currently Europe’s largest data hub, with more than 500 data centres, the majority in the South East.

Slough in west London is the industry’s historic base, largely because of its proximity to both transatlantic connectors and the City of London, whose financial services and banks were initially the biggest customers for computation power.

Last month the government classified data centres as ‘critical national infrastructure’, putting them on a par with power stations and railways but the industry says a broader strategy is required as it moves to meet the growing demand driven by power-hungry AI chips.

High land prices, competition for grid connections and the resistance of local residents have put a premium on further expansion in the southeast, leading some companies to look beyond the industry’s traditional base.

Kao Data, which has an expanding campus in Harlow, Essex, is among those looking to beyond the South East, and broke ground this week on a £350m development at Stockport in Greater Manchester.

More on Artificial Intelligence

Spencer Lamb, Kao’s chief commercial officer, said the UK industry is at a turning point.

Kao Data's site in Harlow
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Spencer Lamb is shown talking to Sky News

“We are under pressure to be able to provide capacity and create data centre buildings to fuel the demand from AI, that’s the challenge. Whether we as a country provide the environment for it is the big question mark,” he said.

“If we want to be part of the global AI opportunity we need to deploy these resources in locations that are suitable, sustainable and have the opportunity for growth. We didn’t really have a plan 10 years ago when cloud computing started, and by accident we’ve ended up where we are today which is in effect consuming all the power into the west of London.

“Now is the time to come up with a UK-wide data centre strategy and start deploying these facilities in other parts of the country, distributing them fairly.”

Kao’s expansion in Manchester exploits an existing industrial site – it will replace a concrete factory – and the availability of a grid connection, fundamental in a notoriously power-hungry industry in which a facility’s size is measured in megawatts not square feet. A 100MW data centre consumes the same amount of electricity as 100,000 homes, a town roughly the size of Ipswich.

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Mr Lamb said it is a model the government should heed. “A realistic opportunity would be to allocate two or three locations across the UK which have access to power as data centre planning zones, where the local authorities understand what a data centre is, are welcoming and we can develop these buildings simply and swiftly and remove a lot of the bureaucracy that exists.”

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The Stockport site also has the backing of the mayor of Greater Manchester, Andy Burnham, who sees data as part of the jigsaw of infrastructure required to boost economic development in the North West.

“This is now critical national infrastructure as designated by the new government, and it makes sense that all of that capacity is not just clustered in one part of the country. We now need to see the emergence of a large-scale data centre industry in the north of England,” Mr Lamb said.

The challenge of further expansion in the South East is evident on the outskirts of the expanding village of Abbotts Langley in Hertfordshire, where a patch of green belt has become a frontline in the debate over data centres and the new government’s commitment to growth.

The proposed site for the data centre in Abbots Langley
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The proposed site for the data centre in Abbotts Langley

The 31-hectare plot, once grazed by cows that produced milk for the nearby Ovaltine factory, has been bought by property developer Greystoke Land and earmarked for a data centre.

The local planning authority, Three Rivers Council, rejected it because of the loss of green belt, but on her first day in office, Angela Rayner, the housing minister, “called in” the application, beginning a process expected to end with her over-ruling the local authority.

Labour promised to back development in government but that does not make it popular. As well as concerns over the environmental impact of a data centre, residents believe the development will remove the only buffer between the village and the motorway.

Stephen Giles-Medhurst, Liberal Democrat leader of Three Rivers Council, 76% of which is made up of green belt, told Sky News communities need something in return.

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“I’m not a total nimby, I can see which way the wind is blowing, but we will make the best case possible to say no to this development because it is an inappropriate site, which causes very high harm to the green belt.

“Ironically we do have some brownfield sites that landowners won’t release, and we can’t compulsory purchase, let’s do something about that and bring them back into public ownership.

“But if at the end of the day we’re overruled then we will be demanding the infrastructure that’s for Abbots Langley and Three Rivers.”

A Ministry for Housing, Communities and Local Government spokesperson said: “Our reforms to the planning system will make it easier to build the key infrastructure this country needs – such as data centres – securing our economic future and giving businesses the confidence to invest.

“Development on the green belt will only be allowed where there is a real need and will not come at the expense of the environment.”

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