Summarize this content to 2000 words in 6 paragraphs in Arabic Welcome back.The US is seeing a spike in start-up bankruptcies, as the technology boom of the early 2020s slows. Moral Money is keen to follow what this trend means for the clean tech industry, which sucked up lots of venture capital funding over the same period. While many governments are sponsoring clean tech start-ups with tax cuts and favourable regulations, the sector can be asset-heavy and capital-intensive, and the path to successful exits remains treacherous.For today’s newsletter I looked at how developing countries, which are custodians to some of the world’s richest biodiversity hotspots, are seeking to be compensated for that stewardship. New artificial intelligence tools relying heavily on genetic information have made it clear that such payment may be not only warranted, but newly lucrative.Thanks for reading.Transition finance is a growing part of bank lending and a strategy increasingly used by multi-billion-dollar investment funds. Yet there is little agreement on what a transition finance strategy should involve. This will be the focus of our next Moral Money Forum deep-dive report — and we want to hear your views. Fill out this short survey to have your say.Biodiversity How biodiversity riches could translate to profitsBefore the current generation of weight-loss drugs, there was hoodia, a cactus that grows in southern Africa’s Kalahari Desert, and which members of the region’s San tribe have long used to stave off hunger. UK-based Phytopharm licensed the active ingredient in the cactus in 1996, and made numerous attempts to commercialise weight-loss products derived from it.The company won licensing deals with Pfizer and Unilever, but drew outrage from campaigners who argued that the country was ripping off indigenous groups that had made the discovery. Indignation grew after the chief executive said it could not compensate local tribes because “the people who discovered the plant have disappeared”. (They had not).This is just one example of companies using biological resources discovered in other countries for financial gain. The UN has attempted to set fairer terms with treaties such as the 1992 Convention on Biological Diversity, which deals with the sharing of genetic resources. But this approach has been seen by many developing countries as unsatisfactory. And earlier tools governing trade in plants and microbes may become less useful as biological data is now frequently transmitted in the form of so-called digital sequence information — the genetic code derived from those physical resources.Now, the UN is working on a fund to pay stewards of biodiversity — notably communities in lower-income countries — for discoveries made with genetic data from their ecosystems. The mechanism was established in 2022 as part of the Conference of Parties to the UN Convention on Biological Diversity, a sister process to the climate “COP” initiative. But the question of how it will be governed and funded will be on the table at the October COP16 summit in Cali, Colombia.If such a fund comes to fruition — a big “if” — it could raise billions for biodiversity goals. The sectors that depend on this genetic data — notably, pharmaceuticals, biotech and agribusiness — generate revenues exceeding $1tn annually, and African countries plan to push for these sectors to contribute 1 per cent of all global retail sales to the fund, according to Bloomberg.There’s reason to temper expectations, however. Such a fund would lack the power to compel national governments or industries to pay up. Instead, the strategy is focused around raising ambition — and public pressure — for key industries to make voluntary contributions.“No, it’s true right now, we’re not about to create a mega global law. There aren’t many places that can do that,” William Lockhart, who co-chaired a working group on the fund during pre-COP16 negotiations that took place last week in Montreal, told me during a Friday press conference. But the fund “can send very clear signals about expectations”, he said.Early signals about those expectations appear to have troubled GSK, the UK pharmaceuticals group, which has argued that the framework established at COP15 in 2022 could have “unintended consequences for public health”, such as delaying medical research and responses to pandemic pathogens.AI is ‘churning through genetic material’Bringing new urgency to the debate: scientists expect the rise of artificial intelligence to supercharge demand for biodata. AI could launch a new era for the life sciences, with wide-ranging applications in therapeutics, diagnostics and industrial technology. And just as the chatbot ChatGPT was trained on reams of text, AI models will need to be trained on vast quantities of biodata sourced from the world’s plants, animals and microbes.Google DeepMind’s AlphaFold, an artificial intelligence model of life’s building blocks, is a particularly high-profile example. The tool, which has made strides in the wicked challenge of predicting protein structure, could help unlock new biological discoveries.“The work that Google DeepMind did on AlphaFold was absolutely integral in making governments and others around the world realise the incredible potential of this technology generally, and therefore the incredible potential of nature,” Lockhart said.Ultimately, he added, such AI deep-learning tools for biology are “churning through the genetic material that nature has provided”, so the UN fund is about trying to “ensure that there’s more nature there in the future”.Private groups are leaning into biodiversity tooLondon start-up Basecamp Research sees the growing need for biodata as an opportunity to build a more open global system for sharing it — one in which stakeholders in developing nations agree to more deals, partly because they know they will be fairly compensated.The global biodata trade is currently like Napster, a free digital streaming service that was superseded by subscription businesses, Basecamp co-founder Glen Gowers told me. The London-based start-up sees a chance to become the next Spotify.Basecamp has built the world’s most diverse database of novel proteins, he said, by compensating partners such as local communities and landowners for the use of their genetic resources.Why would Basecamp be willing to pay, I asked Gowers, for materials that other biotech firms are able to obtain for free?“It will no longer be free in the future,” Gowers said, pointing to negotiations over the global biodiversity revenue mechanism. Currently, he said, “we are seeing countries reject requests for academic research because they understand that they’ll see none of the upside should it be commercialised”.Basecamp is betting that today’s practice of raiding genetic resources from biodiversity hotspots will come to an end.As an example, Gowers pointed to an agreement Basecamp announced last week with the government of Cameroon. Four communities in Cameroon have agreed to allow sampling of genetic resources in their areas, Basecamp said. Partnering with Ajesh, a Cameroonian non-profit, Basecamp will train a local team to extract and process samples, the company said, in a programme it hopes will help residents steward biodiversity.But the major pay-off would come in the future, if Basecamp builds an AI model and trains it on a data set that includes Cameroonian digital sequence information. If that information is used in commercial scientific research, or if the AI model is trained on Cameroon’s DSI, Basecamp says that Cameroon would receive royalties.Gowers declined to share the agreed royalty rate, but said it was “not wildly different” from the number proposed by African countries in the COP16 process. He hopes the convention in Cali will lend clarity to the global trade in biodata — and that an agreement will not only be fairer to biodiversity hotspots but unleash commercial appetite for their resources.Smart readWater consumption has soared in the US state of Virginia, home to the world’s largest concentration of data centres, Camilla Hodgson reports.
