AI Leaders Warn of Catastrophic Harm; Tech Stocks Slide in Response

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1:47Bloomberg 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 Iran-backed 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 Strait 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 after a series of attacks that caused several injuries in the area.

2:33The drone attack, we understand, has come from Iraq rather than Yemen, but it's clearly having an impact on the oil markets. 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 Intermediate said$103.26, a gain of 3.2%. Nathan, with the conflict driving up energy prices, President Trump is urging Ukrainian President Volodymyr Zelensky to hold off on attacking oil refineries in Russia.

3:13He has to stop knocking out diesel fuel in Russia. Let him go after targets, but not diesel fuel, because he's causing a shortage of diesel. President Trump said he's spoken with Zelensky 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. Here in the U.S., diesel averages a record$6.23 a gallon, according to AAA. Well, Karen, President Trump spent the weekend attending the Irish Open at his family's dune bag resort, And he made an announcement as he handed the winning trophy to Ireland's own Shane Lowry.

3:52On behalf of the United States of America, I am going to take the tariffs off. The cheering drowned out the president as he said he'll remove 10 % tariffs from Irish whiskey. Irish distillers had lobbied for the relief. Whiskey from Scotland as well as Northern Ireland is not subject to 10 % duties under the U.S.-U.K. trade deal. The president received a red carpet welcome from Ireland during his two-day trip, though was not without controversy. On Saturday, he sparked a backlash from Northern Ireland when he said he supports a unified Ireland, but later in the weekend, he said he was just sharing his opinion.

4:26We turn to the markets now. Nathan, and stocks are dropping around the world after leaders of the biggest artificial intelligence firms proposed slowing the technology's development. South Korea's Kospi dropped more than 3%. Right now, Nasdaq futures, they're down 1.7%. Both Anthropic and OpenAI are promising measures to reign in the pursuit of cutting-edge AI models to better understand the risks posed by the technology. The developments come after President Trump played down the need for further guardrails on Sunday. We're leading China in AI. We're the most sophisticated country in the world.

5:01And frankly, I want to keep it that way, because whoever wins, AI wins. And we can put guardrails, we can do this and that. But I think you have a lot of negative forces that are bringing it up that shouldn't be bringing it up. And they're bringing up things that won't happen. But whoever wins with AI wins. You know, it's an expression that I came up with and it's true. In June, President Trump signed an AI cybersecurity executive order, leaving companies to decide whether to have new models reviewed by the government. House Minority Leader Hakeem Jeffries is backing stronger safeguards. We should take decisive action now so that we can slow down, as the CEOs have recently acknowledged, slow down the pace of development in order to protect the American people and ensure that AI is proceeding safely.

5:49House Minority Leader Hakeem Jeffries made the comments on ABC's This Week. Catch the program Sundays on Bloomberg Radio. Well, after AI leaders' dire warnings, Karen, China is hitting back. A Chinese foreign ministry spokesman says countries should promote open, inclusive, universally beneficial and ethical AI development. He said, quote, fear-mongering, confrontation and vicious competition will only disrupt the process of global AI governance and serve the interests of no one, end quote. Well, the fight over AI safety, Nathan, comes at a pivotal moment for Anthropic as it prepares to tap public markets.

6:24The Financial Times reports the company expects to be profitable this quarter as it prepares for an initial public offering. Analysts expect it to match or exceed SpaceX's record$86 billion offering earlier this year. Sources tell Bloomberg the company chose the Nasdaq as its listing venue. Let's turn to the economy now, Karen. All eyes are going to be on the Fed this week. Chair Kevin Warsh is facing mounting pressure to hike interest rates to tame elevated inflation. That decision comes on Wednesday. We get more from Bloomberg's Michael McKee. Investors are betting the first Fed rate increase since 2023 is on tap Wednesday.

7:00Last week's producer and consumer price indexes came in only a little higher than expected, but enough to show the central bank isn't making progress toward its 2 % inflation goal. If policymakers follow through, the focus will turn to their October and December meetings. Historically, one move higher is a prelude to at least two or three more. We'll have a better idea after the meeting when they publish their economic forecasts and dot plot. Another reason to expect a move, the Bank of Japan is considered likely to raise rates this week as well. Absent a Fed increase, rate differentials might lead to some investors moving money from the U.S.

7:37to Japanese securities. That's something the Treasury Department does not want to see. Michael McKee, Bloomberg Radio. All right, Mike, thanks. In sports, the American drought continues in the world of tennis. Ben Shelton came close but lost in the finals at the U.S. Open. And Bloomberg's John Stashauer joins us with more. John, good morning. Good morning, Karen. A lot of people went to the men's singles final in hopes of seeing something that hasn't happened in 23 years. An American winning a grand slam. But Shelton was beaten in four sets by Alex Zavera of the top seed who won despite fans openly rooting for Shelton.

8:12An incredible atmosphere to play in. And even though I know that the crowd was against me, the crowd was always incredibly fair. And we as players, we appreciate it. You guys brought the energy. You guys brought the noise. And we really thank you guys for that. Zavera failed to win any of his first 40 Grand Slams. Now he's won two of his last three, having also taken the French Open. John Stanchet, we're at Bloomberg Sports. Karen, Nathan? All right, John, thank you. Well, what's in a name? Well, a lot, according to one of the world's biggest weight loss companies. Let's go to London and get the latest from Bloomberg's Ewan Potts.

8:44Good morning, Ewan. Nathan and Karen, Danish drugs giant Novo Nordisk is slimming down, at least when it comes to its name. In a bid to become more recognisable in the competitive obesity market, the company's products will be known simply as Novo. The move follows US rival Lily, which increasingly relies on its single name identity, dropping the word Eli from its marketing materials. Novo will also make changes to its trademark bull logo, with the animal now set to look to the right. Whether the bull has also been slimmed down, well, we're yet to find out about that. In London, I'm Ewan Potts, Bloomberg Radio.

9:18All right, Ewan, thank you. Well, we want to introduce you now to Ask B, Bloomberg's conversational AI for company and markets research. Ask a question to analyze companies, uncover trends, and explore Bloomberg market intelligence alongside your firm's proprietary data. Type Ask B Go on the Bloomberg terminal or tap the Ask B icon in the mobile app.

9:42Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's John Tucker. John, good morning. And good morning, Karen. Nearly all Amtrak trains between New York and Boston were canceled Sunday. After flash flooding left high water and debris along the northeast corridor, only the first two trains departing from New York Sunday reached Boston. As of 8.30 last night, service was still suspended. A second federal judge has issued a new order freezing President Trump's order to limit mail-in voting for midterms. Let's get that story this morning from Bloomberg's Monica Ricks.

10:15The decision issued late last night comes from a judge in Washington, D.C. that was nominated by President Trump. He declined to freeze the president's executive order earlier because at the time he thought it was premature. But now says it's clear many people could lose their ability to vote if it goes into effect. That previous order, by the way, is also before the U.S. Supreme Court because election officials say they couldn't implement Trump's new requirements before November. States started mailing out their ballots last week. Monica Ricks, Bloomberg Radio. Canadian Prime Minister Mark Carney courting some of the world's biggest investors this week as he tries to reduce Canada's economic dependence on the U.S.

10:53About 300 CEOs and senior executives managing more than$120 trillion in assets gathering in Toronto right now for the Canadian Investment Summit. New York City experienced another cluster of Legionnaires disease, this time in the Bronx, just weeks after a cluster exposure in Manhattan was declared over. Here's the health commissioner, Dr. Alistair Martin. The data that we have in terms of the patients that have gotten sick have led us to believe that there's probably a cooling tower in one of these two zip codes that is causing this cluster. But in your city health department, it's reported at least one death.

11:30Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm John Tucker. This is Bloomberg. Karen. Thanks, John. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. The first Sunday of the NFL season and Chicago and Carolina were 31-24 at halftime. The Bears won the game 59-37. They were 51st downs, over 1 ,000 yards of offense, the highest scoring week one game in NFL history. The game last night, the Giants playing for the first time under new coach John Harbaugh. They upset Dallas 28-20. That's your Bloomberg Sports Update.

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14:24Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager, and rapid artificial intelligence development is suddenly at the center of the conversation now on Wall Street and in Washington, with the leaders of the three biggest AI developers now calling for the industry to put on the brakes. Democratic Senator Chris Coons of Delaware says he agrees. Now that we've got agreement from Elon Musk and Sam Altman and Dario Amidai, we need agreement from Republicans and Democrats in Congress to put aside our partisan pre-election bickering and put in place some real guardrails before AI goes off the rails.

15:07It's Delaware Democrat Kyrus Kuhn speaking on Bloomberg this weekend, heard Saturdays and Sunday mornings on Bloomberg Radio. And joining us on this Monday morning is Bloomberg News senior tech editor Shona Ghosh. A lot of attention this morning, Shona, on Anthropics CEO Dario Amadei's 3 ,800-word essay about reining in artificial intelligence. How serious could this be? Good morning. Good morning. Yes, just some light reading for AI watchers over the weekend and then some market reaction going into Monday. I mean, what's pretty interesting is a lot of these AI CEOs have deep philosophical backgrounds.

15:46And so some of the doubts derive from the fact that these are quite thoughtful, you know, future gazing executives. So I think, you know, they've been sounding the alarm around this stuff for quite a long time. But it's as the two biggest companies, OpenAI and Anthropic, move towards an IPO that we're beginning to take it a bit more seriously because there is a financial impact from what they're saying. Now, certainly, with OpenAI CEO Sam Altman now saying that now might not be the time to go for an IPO until maybe at least next year. But could there be a sense now that with the kind of development that we've seen and the pretty dire warning we heard from now former anthropic researcher Jacob Coxon that some of this may be too little too late?

16:35I think it's a little hard to know what's going to happen. and 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. It's also Google. It's also Meta. It's smaller scale startups. You know, many of the main researchers have left the big AI labs and are going off to do their own thing because they see the future of AI as lying somewhere outside of large language models, which is the type of AI we're mostly familiar with, chatbots more or less. You know, short of government intervention, you're not going to really get all these different stakeholders to voluntarily say, yes, actually, we've raised all this money, and we're going to slow down the development of RAI just because these two leading-edge companies say so.

17:21So I think unless we move towards regulation, then, you know, I don't think we're going to see the companies necessarily volunteering in a coherent way to slow everything down. Well, that gets to a fundamental question, doesn't it? because on one side you have members of Congress saying that maybe we should be doing some regulation here. And on the other side, you have President Trump sort of downplaying the concerns. In our last minute here, what is the chance that we see some kind of regulation in Washington, D.C.? Yeah, it's pretty interesting because you just had Trump getting, you know, all the different leading economies to agree to light touch regulation.

17:56So it certainly doesn't seem like the White House politically has much appetite for stronger regulation. but whether there is a sort of grounds up push to do it or some of the leading AI companies self-impose a form of regulation I think remains to be seen but certainly from the Trump administration as you say if anything he has pushed allies to go more quickly and to pursue a more light touch approach you know the EU and China in a sort of very domestically focused way are actually much more in favour of heavy AI regulation and have imposed more regulation so you might see stronger international regulation actually before you see stronger U.S.

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19:12It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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