Episode summary
AI Leaders Warn of Catastrophic Harm; Tech Stocks Slide in Response | Bloomberg Daybreak: US Edition
Bloomberg Daybreak: US Edition
· · 16 min
Summary
Oil markets and AI policy dominated the morning, with the biggest moves coming from Saudi Arabia’s closure of the East West pipeline after attacks and from a sharp selloff in tech stocks after AI leaders called for slower development. Brent crude rose 3.2% to just under $108 a barrel as the pipeline shutdown threatened a key route around the Strait of Hormuz, while Iran delayed a meeting on a temporary shipping lane through the waterway. The hosts also noted record U.S. diesel prices and the wider spillover from the Middle East conflict into energy and transport costs.
The other major story was a growing debate over artificial intelligence safety. The host said Anthropic and OpenAI are promising new measures to rein in cutting-edge model development, and an analyst argued that markets are taking the warnings more seriously because the companies are nearing IPOs. The analyst said a broad slowdown is unlikely without government intervention, especially because other firms and investors are still pushing ahead.
Attention then shifted to the Fed, where investors are betting on the first rate hike since 2023 as inflation remains above target. The host said Chair Kevin Worsh faces pressure to move Wednesday, even as President Trump continues to push for lower borrowing costs and more support for rapid AI growth.
Key takeaways
- The hosts said Saudi Arabia’s East West pipeline closure is boosting crude prices and could force output cuts if the disruption lasts.
- An analyst said the AI leaders’ warnings matter more now because OpenAI and Anthropic are moving toward public markets.
- The analyst argued that a broad slowdown in AI development is unlikely unless Washington imposes regulation.
- Investors are betting the Fed will raise rates Wednesday, with inflation still above the 2% target.
- The host said the Fed’s decision could sharpen a conflict with President Trump, who wants lower rates and faster AI progress.
Notable quotes
“Both anthropic and open AI are promising measures to reign in the pursuit of cuttingedge AI models to better understand the risks posed by the technology”
“I think it's a little hard to know what's going to happen. Um I I think you're right. It probably is too little too late”
“I don't think we're going to see a huge slowdown in the pace of development because it's not just OpenAI and Anthropic”
“unless we move towards regulation then um you know I I don't think we're going to see the companies necessarily volunteer volunteering in a coherent way to slow everything down”
“Investors are betting the first Fed rate increase since 2023 is on tap Wednesday”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. — Good morning. I'm Nathan Hager — And I'm Karen Moscow. Here are the stories we're following today.
Karen, we begin with the latest from the Middle East. Officials in Yemen say Iranbacked Houthi militants have seized more key islands in the southern Red Sea. It is adding to pressure that's forced Saudi Arabia to shut down the East West pipeline.
That's been the kingdom's key alternate route for crude around the straight of Hormuz. We get the latest from Bloomberg Middle East editor Patrick Sykes in Istanbul. Saudi Arabia said that this pipeline was closed on Thursday as what it called a precautionary measure uh after a series of attacks that caused several injuries in the area.
The drone attack we understand has come from Iraq rather than Yemen. Um but it's clearly having an impact on the oil markets. And Bloomberg's Patrick Sykes reports Iran has postponed a meeting with several Gulf nations that was planned for today on establishing a temporary shipping route through Hormuz.
Iran's foreign ministry says Saudi Arabia asked for the delay in light of the latest attacks. And checking crude prices right now, Brent is up 3.2% just shy of $108 a barrel. West Texas Intermediates at $1326, a gain of 3.2%.
Nathan, with the conflict driving up energy prices, President Trump is urging Ukrainian President Vladimir Zalinski to hold off on attacking oil refineries in Russia.
He has to stop knocking out diesel fuel in Russia. Let him go after targets, but not diesel fuel cuz he's causing a shortage of diesel. — President Trump said he's spoken with Silinski about it, but it's unclear how Ukraine will respond. Russia has intensified missile and drone attacks on Ukrainian cities and Ukraine has responded with strikes on Russian energy.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai regulation
- security breaches
- oil prices
- fed rate hikes
- inflation
Companies and tickers mentioned
- Anthropic
- OpenAI
- Sparta Commodities SA
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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