Global Stocks Plunge, Zelenskyy Blasts Musk & Trump, 'Beige' UK Budget

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Bloomberg Audio Studios, Podcasts, Radio, News.

Caroline Hepker (0:09)

This is the Bluebeg Daybreak Europe Podcast. Good morning, it's Thursday the 15th of October. I'm Caroline Hepker in London. Coming up today, stock losses deepen as semiconductor firms and AI darlings plunge across the globe. Ukraine says that it will resume refinery strikes as Russia continues its attack, and Zelenskyy lashes out at Trump and Musk. Plus, will it be beige? The UK's Chancellor vows to stay the path on boring ahead of this month's budget. Let's start with a roundup of our top stories.

The global AI selloff is accelerating, sending South Korean stocks down 8% and forcing a temporary trading hold. Samsung and SK Hynix fell more than 9%, extending a route that has also hit makers across Wall Street. Bloomberg's Anthony Stevens says the downside momentum is serious.

Anthony Stevens (1:02)

It's really quite a horrendous day. You look at the big caps in Japan and Korea, those are down around 5% to 6%.

But you also have a lot worse pain on these cyclicals that were traded as structural names in the AI supply chain, the likes of the passive component makers, cables, capacitors, all this niche stuff in the AI supply chain is getting hit around 9% to 10%. This is a significant drawdown that is also starting to cause real technical damage.

Caroline Hepker (1:31)

Bloomberg's Markets reporter Anthony Stevens there speaking earlier, the selling pressure intensified after US inflation hit a five-month high, boosting expectations for further federal reserve interest rate hikes. US semiconductor stocks have now erased $1.6 trillion in six sessions following unwinding this year's blistering AI rally. Investors are also questioning AI spending after Callweave's bonds plunged to levels that typically indicate distress. Callweave's debt, due in 2032, is trading below $0.80 a dollar, with yields above 15%.

That comes as Callweave seeks an investment-grade rating, which its co-founder told the FT would give it access to quote, all the money in the world. An analyst at DA Davidson, Gil Vouria, says that borrowing at high interest rates to build data centres may not be a good investment.

Gil Luria (2:32)

If Callweave is borrowing at 9% and the best return they can get off of that is a 5% return, it doesn't matter how much they scale. They're destroying value at every term. And that's especially true for the type of neocloud that funds their entire investment base on debt. And the more leverage we use to build data centres, the more risk we're bringing into the system.

Caroline Hepker (2:55)

Gil Vouria there, who has previously called Callweave the subprime tranche of AI.

Callweave shares fell as much as 17% on Wednesday, although they're still up by more than 60% since last year's IPO.

Anthropic has told prospective investors that its third quarter revenue hit $16.8 billion dollars, as it pushes ahead with plans to go public. The company behind Claude says that it has achieved profitability in the quarter on an adjusted basis. Jensen Wong, the CEO of NVIDIA, whose chips Power, Anthropic and OpenAI's models, has given his view on Anthropic's upcoming IPO, speaking exclusively to Bloomberg.

Jensen Huang (3:39)

I'm delighted to see their success. First of all, these are the two fastest growing technology companies in history. Their revenues are real, and their profits generated from the revenues are real. This last six months, AI went through a transition. It used to be unprofitable, unuseful, very curious, great potential. And now we're using it in real work. It's productive and it's profitable. It's generating enormous profits for them. And so because the tokens are now profitable, And because the token demand is so incredible, it's the reason why they want more compute, because the compute translates to more tokens, to more profits, and that flywheel for them is going to be great.

Caroline Hepker (4:18)

So that was NVIDIA's Jensen Wang there talking about the industry as a whole, as Anthropic is set to begin formally marketing its IPO as soon as the week of the 9th of November.

Now, in other news, Ukraine's president Volodymyr Zelenskyy says that he plans to resume strikes on Russian refineries, defying President Trump's request to stop. He spoke to the Financial Times after accusing the US president and Elon Musk of throttling Ukraine's satellite usage. He told journalist Piers Morgan that he feels betrayed.

Volodymyr Zelenskyy (4:55)

What was really strange and what was not like between partners, that they switch off Starlink. So, it's something absolutely crazy steps between us. So, we hold energy ceasefire from our side. Russia attacked us with hundreds of different missiles, including 40 ballistic missiles. And all these ballistic, by the way, all 100% that they use them against our energy infrastructure.