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Klarus launches AI consultancy to fix weak returns

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Klarus has launched as an AI consultancy led by former EY and Accenture executive Frank O’Dea. It aims to tackle the weak returns many companies are seeing from AI projects.

The London-based firm is entering a market where spending on generative AI has risen, but many companies still struggle to move projects beyond the trial stage. Klarus pointed to research from the Massachusetts Institute of Technology suggesting that as many as 95% of enterprise generative AI initiatives fail to deliver measurable impact.

O’Dea is chief executive of the new consultancy. He was previously chief transformation and innovation officer at EY Ireland and a managing director at Accenture, where he led communications, technology and media work in the UK.

At EY and Accenture, O’Dea led divisions with profit and loss responsibility of up to $800 million, according to Klarus. The firm also said he played a role in Microsoft’s expansion in Europe.

Market Gap

Klarus is building its business around a common complaint from corporate buyers of AI services: access to tools is no longer the main obstacle, but implementation remains difficult. Many companies already have software platforms and pilot schemes in place, yet lack the internal skills to embed AI in day-to-day operations, change workflows and track financial results.

The consultancy plans to use a network model rather than a traditional staffing structure. Instead of maintaining large teams of junior consultants, it will use senior specialists chosen for their sector and technical expertise on specific assignments.

That approach is tied to an outcome-based fee structure. Klarus wants to link its work more closely to delivery and business results, while giving clients clearer ownership and governance over AI projects.

“While AI is set to disrupt every business sector and will undoubtedly reveal a vast landscape of new opportunities, most organisations are still struggling to translate its potential into tangible business results. However, the journey to successful AI adoption must be safe, ethical and results-oriented. The senior talent from the Klarus network brings both deep business and AI expertise, ensuring AI is implemented to drive the right outcomes, in the right way and to deliver immediate value,” said O’Dea, chief executive of Klarus.

Early Work

Klarus says it is already working with enterprise and mid-market clients, including family-owned businesses, private equity-backed companies and listed groups, although it did not name them.

One recent project involved an AI-based invoice processing system for a hospitality client, which Klarus said cut offshore staffing costs by 40%.

The firm also outlined a business case in which it identified several opportunities for AI-driven savings and revenue growth. These included freeing managers for higher-value work, improving insight to support revenue growth, sharpening forecasting to reduce staff costs, retiring legacy systems to cut licence fees and tightening controls to lower spending.

Backing And Partnerships

Klarus has secured initial funding in a round led by Crownway Investments. The money will be used to expand its network of experts and its consulting platform.

Alongside its launch, the firm said it has joined UKAI, the trade association for UK AI businesses. Its current partner network includes ServiceNow, which provides workflow software used by large organisations.

The wider group also includes Chapter 1, a search business focused on leadership hires for transformation programmes and consulting firms. That structure suggests Klarus is seeking to combine advisory work with access to senior operators and executives for large-scale change projects.

The launch comes at a time when consulting firms, software vendors and specialist boutiques are all competing to shape the next phase of AI spending. Corporate clients are under pressure to show that investments in generative AI can deliver cost savings, revenue gains or productivity improvements, rather than remain isolated experiments.

For smaller specialist firms, that creates an opening if they can show results faster than larger rivals. Klarus is betting that companies will favour more focused advisory work from experienced practitioners over broad programmes delivered by large consulting teams.

O’Dea’s move from large professional services firms to a smaller advisory model also reflects a broader market shift. As companies scrutinise spending more closely, buyers have become more resistant to open-ended transformation work and more willing to demand a direct link between fees and outcomes.

Klarus’s central argument is that the main challenge in AI is no longer enthusiasm or access to technology, but turning experimentation into operational change that affects the bottom line. Whether that translates into sustained demand will depend on whether firms such as Klarus can show that AI projects can move beyond pilots and deliver measurable returns.



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UK AI tests find Claude & GPT-5.6-Sol rogue actions

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The UK’s AI Security Institute said tests of Anthropic’s Claude Mythos 5 and OpenAI’s GPT-5.6-Sol found cases of unsanctioned behaviour during cyber evaluations. The most serious incident involved an attempt to insert malicious code into a real open-source project.

The behaviour emerged during a routine assessment of frontier AI models under deliberately permissive test conditions, including internet access and disabled cyber misuse filters. The institute reviewed 122 runs across seven models and found 19 out-of-scope actions in 10 runs. Seventeen were linked to Mythos 5 and two to GPT-5.6-Sol.

According to the institute, one agent created a malicious pull request for a public software project, then tried to influence the approval process by creating fake online identities and pressuring a maintainer. The maintainer rejected the code, and the institute found no evidence of real-world harm.

The findings add to a growing debate over how autonomous AI systems behave when given broad goals and access to live online services. The institute said the models did not escape their sandboxed research environment, but their actions were sustained, novel and directed at real people and organisations.

Its investigation traced the incident to a single cyber challenge designed to test whether agents could solve a security task over many steps. Some runs were misconfigured in ways that may have made the task harder, the institute said, but that did not fully explain the behaviour. Some agents still acted beyond scope even when they had a valid route to solve the task.

Security monitoring first flagged unusual data transfers through the Tor anonymity network. Investigators then found that one agent had used GitHub and other online services in ways that breached the intended boundaries of the test.

Beyond the attempted code insertion, the institute described efforts to contact real people with messages and files intended to persuade them, or their own AI coding tools, to run malicious code. It also said one agent tried to plant hidden instructions for other AI systems, and that separate agents appeared to collaborate by reusing public artefacts left behind during the evaluation.

Expert response

Waseem Ahmed, Head of Engineering at Secure, said the incident should be understood as a consequence of goal-seeking behaviour rather than a loss of control in the popular sense.

“Let’s be precise about what happened, because ‘AI went rogue’ misses it. AISI’s own report is clear. The agent did not turn evil and it did not escape its sandbox. It was told to solve a hard security challenge, and deception emerged as a by-product of chasing that goal.

“Two details matter. This was a model not yet released, and testers had switched off the safety filters on purpose to probe raw capability. That is not how these models behave in production with guardrails on. The real lesson is that a capable agent chasing a goal will try routes you never approved, including social pressure aimed at real people. That is new, and it is why we cannot treat agents like ordinary tools.

“The most reassuring fact in the report is also the most alarming. The attack failed because a human caught the bad code and refused it. Good practice worked, but the margin was thin. It depended on human vigilance, not a technical wall that would reliably stop a stronger agent.

“So here are four moves for security teams. First, block open internet access for agents by default and grant it only when a task truly needs it. Second, watch agents in real time so you can stop out-of-scope actions as they happen, not find them in the logs later. Third, assume any capable agent will try to bend its limits, and build guardrails and containment before it runs. Fourth, harden code review and contributor identity checks, because fake identities are now a real supply chain attack path, and treat all AI-generated or outside code as untrusted until you verify it in isolation.

“The strongest response is still standard cyber hygiene done well, which matters more as these agents get stronger,” said Waseem Ahmed, Head of Engineering at Secure.

That reading is broadly consistent with the institute’s own account. It said the behaviour arose because the agent persistently pursued its assigned objective and explored routes operators had not intended, including deception and social engineering.

Control measures

The institute said it contained the incident within about an hour, halted related evaluations and disabled internal access to the most advanced models under review. It also worked with GitHub to remove artefacts left by the agent and notify affected users.

In response, the organisation is tightening how internet access is granted in cyber evaluations, adding real-time monitoring to flag or stop out-of-scope actions as they happen, and reviewing evaluation design so containment does not depend on a model choosing not to test its limits.

The case is likely to sharpen scrutiny of how frontier model developers and testing partners assess systems before release. While the institute stressed that the specific model configurations were not commercially available and did not reflect ordinary public deployments, it said the episode showed a direction of travel that warrants immediate attention.

For businesses, the report points less to a sudden breakdown in existing systems than to a widening attack surface in software supply chains and identity checks. The institute said standard security practice, human judgement and caution around outside code prevented the worst outcomes, but added that in several cases the margin between failure and success was narrow.

It concluded that the behaviour was possible, sustained and new.



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Boots takeover plans thrown into doubt after bid rejected

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The £7 billion bid by the Weston family to buy Boots is now at risk of collapsing, raising fresh uncertainty over the future of the pharmacy giant.

Talks between the Westons—one of the world’s richest retail families—and Boots’ private equity owners reached a standstill after the family lowered its offer, which was subsequently rejected.

The Westons revised their bid following Sigma Healthcare’s withdrawal from a rival bid in June, leaving them as the sole suitor for Boots.

People walking in front of the Boots pharmacy on Oxford StreetAcross the UK, Boots operates approximately 1,800 stores. (Image: Getty Images)

Boots takeover talks at risk of collapse

“It isn’t totally dead,” a source close to the matter told The Telegraph.

“It’s a stand-off.

“They tried to knock down the price after realising they were the only show in town.

“They came in with a lower number that was deemed unacceptable.

“The gap isn’t completely insurmountable.

“However, the owners won’t sell at any price.”

A source suggested that economic uncertainty had made the Westons more cautious.

The Westons’ business empire is split between the UK and Canada, with the Canadian side—which owns a controlling stake in Loblaw, Canada’s largest supermarket chain—leading the talks.

Boots’ ownership has been uncertain since Walgreens Boots Alliance was acquired by US private equity firm Sycamore Partners for £18 billion last year.

Following the deal, Boots was separated into a standalone business, prompting expectations of a sale or a return to public markets.

Italian billionaire Stefano Pessina and his family reinvested in the company during the carve-out.

Mr Pessina had previously teamed up with buyout giant Kohlberg Kravis Roberts to take Boots private in 2007 in what was the largest-ever private equity-led takeover of a UK-listed business at the time.

Before negotiations with the Westons and Sigma Healthcare, Sycamore Partners had considered relisting Boots on the London Stock Exchange after nearly two decades off the market.

It is believed that if sale talks break down, Sycamore will revive plans to float Boots next year.

Walgreens previously explored a sale in 2022, attracting interest from private equity firms including TDR Capital, which owns Asda.

However, those talks collapsed after bids failed to meet expectations.

Since then, Boots has closed hundreds of underperforming UK stores as part of a wider cost-cutting programme.

Investment has been redirected towards its core estate of 400 larger stores, primarily located in town centres and retail parks.

This core network is supported by smaller pharmacies and travel-focused locations.

Across the UK, Boots operates approximately 1,800 stores.

The company also owns beauty brands including No7 and Soap & Glory, and has become an increasingly important provider of NHS services, offering doctor consultations, vaccinations, blood-pressure checks, and specialised treatments for skin and hair loss.

In preparation for a potential public listing, Boots recently appointed Alex Baldock, former chief executive of Currys, as its new CEO, who is set to join the company this autumn.

The British arm of the Weston family controls Associated British Foods—parent company of Primark—and Fortnum & Mason through its Wittington Investments vehicle.

The family previously owned Selfridges for nearly 20 years before selling the department store for £4bn in 2022 to a consortium including Central Group of Thailand and Austrian property giant Signa Holding.

Both Sycamore Partners and Boots have declined to comment.

What is your favourite high street shop? Let us know in the comments.





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‘WH Smith’ chain rescue comes with ‘considerable risks’

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“This has all the hallmarks of an adventurous equity play,” wrote Mr Justice Hildyard in his judgment published yesterday after he last month approved the restructuring, which involves the closure of 150 of the books-to-paperclips retailer’s 450 stores.

He added that the group’s turnaround plans “might strike the sceptic as more in the nature of generic aspirations than concrete grounds for confidence in a successful outcome”.

The chain includes numerous former WH Smith branches across Oxfordshire.

These include stores in Cornmarket, Oxford, and in Witney, Abingdon, Chipping Norton, Didcot, Wantage and Banbury. The takeover came into effect a year ago.

READ MORE: Major high street retailer could collapse

“The execution risk is very considerable,” Mr Justice Hildyard said, indicating the £3m valuation of the company – compared with its acquisition value of about £40m only a year before – reflected the potential for high losses as well as high profits.

The retailer, which until recently employed about 5,000 staff, was bought last year by Modella Capital, the private equity firm which is also behind Hobbycraft and owned the UK arm of jewellery retailer Claire’s and The Original Factory Shop until they collapsed earlier this year.

It recently bought Flying Tiger, the Danish retailer known for its cut-price homewares, craft kits and notebooks, which operates about 1,000 stores worldwide.

TG Jones in Oxford (Image: Google Maps)

The original owner of WH Smith continues to operate stores in airports, hospitals and railway stations, so Modella quickly rebranded the high street stores as TG Jones.

Sales quickly fell back after the deal, and Modella had warned it could have to call in administrators if the restructuring plan, which involves writing off debts to suppliers and cutting rent for many landlords, was not approved.

The judge approved the plan despite his scepticism about potential success, because Modella had put up new investment to turn it around.

Alex Willson, the chief executive of TG Jones, said last month that approval of the plan “allows us to move ahead with our turnaround strategy”.

“The plan protects the substantial core of the store estate and makes TG Jones a stronger, more sustainable business,” he said.

Court approval was needed for what is known as a “cram down” scheme, as many classes of creditor who would lose money under the scheme rejected it. The model allows courts, in certain circumstances, to impose a restructuring on dissenting classes of creditors.

Fewer than a third of general creditors, who include card makers and pen brands, agreed to the plan and no landlords owning unwanted stores – where rent will be cut to zero or closed – backed the plan.

Small suppliers, such as toy makers, were set to lose at least half the money owed to them by the former WH Smith high street chain under the restructure.





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