Today’s briefing:
— Why tech stocks are slumping
— Why Istanbul is flooding
— Why the world is losing time
Your Insider’s briefing:
— Why tech stocks are slumping
— Why Istanbul is flooding
— Why the world is losing time
Good morning {{first_name | Intriguer}}. There are few things quite like the ego-boost of stepping off a long-haul flight into an arrival hall, spotting a driver holding up a professional sign, and whispering to yourself that you made it buddy.
Except the one time I even got close, I touched down in an exotic foreign capital (ok it was Lima) and sauntered over to my driver only to realise his card didn’t show my name (Jeremy Dicker) so much as a strange kind of approximation: “Mrs Dicker Jeremir”. 🤔
No matter how big a dog you may think you are, this universe has an uncanny way of eventually handing you that same dose of cardboard humility.
All that to say that if you’ve been watching global markets this week, you might notice the entire tech sector now seems to be going through its very own “Mrs Dicker Jeremir” moment. Shall we see why?
 | Managing Editor Jeremy Dicker |
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Number of the day
10
That’s apparently how many SpaceX cold-gas thrusters are mounted on the new Tesla Roadster, which just showed off its ability to briefly hover, flip, and beyond. Musk unveiled the prototype in 2017, and says it’ll now enter production in 2028.
When the chips are down
For years, the market rule has been simple: write "AI" on a napkin, hand it to an investor or lender, then receive a billion dollars.
But if you listen veeeeery closely to the trading floors of Manhattan, Seoul, Tokyo, and Amsterdam today, you might now hear the faint, agonising sound of financial models being frantically updated for the first time in a while.
So let's do a quick world tour of this tech sell-off, starting with...
☁️ 15%
That's now the eye-watering yield on corporate bonds issued by CoreWeave.
If you haven't been tracking the 'neocloud' world, CoreWeave is the poster child: a former crypto-mining firm (!) that pivoted to buying tens of thousands of Nvidia chips, bundling them into massive data centres, then renting them out to AI labs.
To build that empire, CoreWeave has borrowed... oh, $50B? But secondary markets are now trading those bonds in jittery ways. For example, unsecured 2032 notes CoreWeave issued just in June at 9.6% (ie, we'll pay you 9.6% annual interest until 2032) are already now getting repriced at 15%.
Translation? CoreWeave's lenders — worried whether they'll get repaid — are selling off those $100 IOUs, but folks are only willing to pay ~$75 for the risk!
Or to put it another way, markets are worried the canary in the levered AI infrastructure mine is about to croak.
Why? CoreWeave revealed it's now burning nearly a quarter of all revenue just on interest, delivering one of the highest recent debt-service ratios. That's approaching distressed levels, as analysts at Gartner warn that ~80% of the world's independent neoclouds might not survive the decade intact!
Okay, so is this just a CoreWeave problem? Well...
🔴 9%
That's how hard Oracle's shares fell in the same Wednesday session that hammered CoreWeave. Oracle! A decades-old software giant long seen by markets as a smarter, more diversified way to ride the AI boom than highly-leveraged crypto-bros.
But it's still now effectively (among other things) a massive debt-fuelled AI infrastructure landlord, and markets are warning that unless you have Google or Microsoft-sized pockets, paying off all that floating-rate debt while waiting for your AI startup customers to finally monetise might be a dangerous game.
So it's not just one canary in one mine. In fact, several others just chirped, whether Oracle in the US, Nebius in Amsterdam (-20%), IREN in Australia (-25% in two weeks), or SoftBank in Japan (-9% on its broader investor exposure).
Now while we're in Japan, let’s consider...
⚡ 7.2%
That's the brutal single-day drop for Japan's chipmaking tool giant, Tokyo Electron. Why?
It's one of several (like Korea's Samsung and Hynix) sweating at the weekend flex by China's memory underdog CXMT that a) it's made progress on a new type of high-density DRAM, and b) it's now cracked 10% global market share.
So you've got East Asia's hardware giants suddenly feeling sandwiched between squeezed Western buyers on the one slice, and China's rising suppliers on the other, making some of those valuations look tougher to justify. Even the original Dutch lithography gurus at ASML — still considered way out in front — copped a ~7% hit.
Okay, so maybe some nerds lose some cash. No big deal? Well...
🏛️ 10%
That's the share of all new investment-grade corporate bonds worldwide now being issued by the big AI hyperscalers, according to the IMF's latest Global Financial Stability Report this week. Two years ago? It was just 1%.
Or to put it another way, even the deep-pocketed hyperscalers (Microsoft, Google, Amazon etc) have hit the limits of their free cash flow and are now borrowing so much, it's brewing a broader systemic risk.
How? The IMF is warning about what's long been a meme: we're talking ~$1T in convoluted circular financing deals where the AI boom is somehow financed by a few firms role-playing as both suppliers and customers. If those future profits don't pan out, you get everyone — not just those neocloud crypto-bros — wobbling at once.
Yikes, surely Intrigue must conclude this piece with a positive palate-cleanser? Fine.
⛏️ 69%
That right there is not just a funny line from Billy Madison (though it is), but actually the massive jump in quarterly profit just recorded by Taiwan's legendary chipmaker, TSMC. They've posted a record $23.6B quarterly net profit, now raising their full-year growth outlook another ~44%.
So... what gives? Is TSMC immune to this sell-off? Or it’s the last domino to fall?
There's evidence for both. TSMC is still AI's absolute bottleneck: whether you're a deep-pocketed hyperscaler or a debt-hooked neocloud, everyone still has to pay TSMC to make the chips. And right now, TSMC's fabs are still running at capacity, with a waitlist! So physical demand hasn't collapsed... yet?
We add that open-ended 'yet' for dramatic effect, but also because if high interest rates keep crushing those neoclouds and forcing Big Tech to tap the brakes, those orders might indeed slow down.
So it's possible TSMC isn't proof the tech trade is healthy, so much as just proof the canary still way back out near the mine's entrance is feeling fine. Or to put it another way, TSMC's record profits might be proof of the ol' cliché that when a gold rush ends, the guy selling the pickaxes tends to be the last to go broke.
Intrigue’s Take
It’s important to think very carefully about what all these numbers do and do not say…
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Intrigue’s Take
It’s important to think very carefully about what all these numbers do and do not say.
Right as AI keeps on flexing ridiculous new capabilities, like solving century-old math problems or burping out photorealistic movies on your phone, is the market seriously now declaring the dream is over? Nope.
Rather, it’s starting to realise that the whole dream rests on a series of very different business models, some of which are clearly more resilient than others. And this week’s sell-off really feels like the weaker, more leveraged parts now snapping off.
You can roughly sketch the whole stack:
The cash kings (Microsoft, Google etc) can keep building out their AI infrastructure thanks to vast rivers of search, cloud, and advertising cash.
The tollbooths (TSMC, ASML) still own the physical bottlenecks and get paid upfront regardless whether the end-client is a spiv. Speaking of which…
The landlords have a higher concentration of reformed crypto bros (CoreWeave) and convicted inside-traders (co-CEO of Firmus). They’re almost the definition of risk tolerance, with the potential for galactic returns perhaps until the debt gets expensive, which is… now?
But soar with us above that stack for a moment and you might see a broader, salutary reminder: it’s easy to get dazzled by tech royalty; those squillionaire geniuses rocking their leather jackets and crushing their boba tea while getting mobbed by fans in the streets of Taipei or whatever.
And while an iconic — nay, historic — figure like Nvidia’s Jensen Huang clearly gets oodles of big decisions right, this last week or so has been a reminder that even he puts his pants on one leg at a time. The market has been treating phrases like “Nvidia-backed” like fairy dust, but some of those “Nvidia-backed” bets now look ugly, whether it’s CoreWeave flirting with distress, or Australia’s mega Firmus IPO collapsing under the weight of scrutiny.
It turns out sprinkling “Nvidia” or “AI” on a pitch deck doesn’t magically suspend the laws of cash or debt. Maybe as interest rates keep squeezing the market, it’ll force more investors to look past the leather jackets and read some actual balance sheets?
Sound even smarter:
Treasury and German Bund yields caught an unexpected break this week, cooling off to multi-week lows. It’s a signal that for all their faults, they might still be among the best safe-havens on offer.
Tokyo Electron (+40% YTD), Samsung (+65% YTD), and Hynix (+75% YTD) are still having a phenomenal year. Oracle is down ~30% for the year.
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Meanwhile, elsewhere…
🇮🇩 INDONESIA — You’re out.
MSCI, a leading financial index provider, has announced it’s considering removing Indonesia’s equity market from ‘emerging’ to ‘standalone’ status, a decision that would oust Indonesia from MSCI global indices. It’s already triggered an 11% single-day drop on Jakarta’s benchmark index, its worst in decades; the index is already down 40% since January. (MSCI)
Comment: It’s a massive blow for a Prabowo administration that built its mandate on promises of 8% growth driven by foreign investment. MSCI has cited opaque ownership concentration, insider concentration, and a lack of regulatory enforcement, all symptoms of an oligarchy that Prabowo has not only struggled to rein in, but still taps for support.
🇨🇩 DR CONGO — Police raid abroad.
Belgian police have raided the properties of several family members of DRC President Félix Tshisekedi, as part of an investigation into alleged money laundering by Tshisekedi himself. (Brussels Times)
Comment: Tshisekedi is now facing massive pressure from all sides, whether this law enforcement abroad, or his predecessor’s new rebel armed coalition at home.
🇫🇯 FIJI — Margin for improvement.
New Zealand is deploying a six-month team to help Fiji overhaul its security agencies, after the US warned that China-linked hackers had gained access to a Suva-based regional organisation. (Taipei Times)
Comment: The US hasn’t named the target, but speculation immediately landed on the Pacific Islands Forum (PIF) secretariat, which is still trying to coordinate a membership split between those recognising China and those recognising Taiwan. The PIF just held its summit in late August, so the hack’s timing lines up, though PIF also just denied being the target! Coming just after the US sensationally sanctioned a China-born, Fiji-based businessman, it suggests the US is stepping up its counter-intel posture in the strategic region. What’s less clear is whether this is in response to fresh intel about China pushing harder, or the US just drawing a line in the sand.
🇺🇸 UNITED STATES — No livestream.
President Trump has called off the planned livestream of the firing squad execution of US Army major and physician Nidal Hasan, who shot dead 13 unarmed service members in 2009. The U-turn comes after widespread criticism, including from 72 retired high-ranking officers. (NPR)
Comment: Republicans and Democrats were unusually united in their opposition, arguing the livestream amounted to an unconscionable spectacularization of violence. We’d add it also reflected the kind of barbarity the US is theoretically trying to end in places like Iran.
🇨🇳 CHINA — Bridge at last.
North Korea and China have finally opened the much-anticipated New Yalu River Bridge after 12 years of delay. It’s their largest land crossing. (BBC)
Comment: You can read too much into bridges, but these endless delays (on the North Korean side) long served as a reminder how Pyongyang tries to balance its need for Chinese capital against its fear of Chinese dominance. There’s also the fact Kim first inaugurated his new land bridge with Russia last month, reflecting the North’s desperation to strike some kind of balance between its two neighbouring giants.
🇪🇺 EUROPEAN UNION — Budget tensions.
European leaders are fighting over the budget, so nature is healing? This time it’s after Ireland (rotating EU president) circulated a compromise draft cutting $180B from the bloc’s seven-year, $2.2T budget. (Politico)
Comment: Dublin’s draft slashes 8% off the initial Brussels wishlist, falling more heavily on foreign aid and administrative overhead while shielding traditional farm subsidies. But in classic EU fashion, nobody is happy: the frugal six (Austria, Denmark, Germany, Finland, the Netherlands and Sweden) want deeper cuts. Unanimity means this debate will take a while, but France’s Macron wants it wrapped by the year’s end before a Eurosceptic like Marine Le Pen potentially wins the presidency.
🇹🇷 ISTANBUL — Deadly rains.
Istanbul’s heaviest rainfall in 83 years has flooded the city, leaving at least three dead and hundreds more evacuated. (RFI)
Comment: While climate change is driving more frequent cloudbursts across the Mediterranean, this kind of flooding in a mega-city like Istanbul (pop 16 million) will increasingly also be an infrastructure story: decades of concrete paving, capped streams, and overburdened drainage systems leaving nowhere for surface water to go. It’ll also play into Turkey’s politics, sparking fresh mudslinging between Istanbul’s opposition-held municipality and Erdogan’s own ruling nationalists.
Extra Intrigue
Some weekend recommendations from Team Intrigue
Watch: Clue (1985), a classic mystery comedy perfect for the season.
Listen: Will AI replace our scientists and win all future Nobel prizes? Stanford computer scientist Jure Leskovec investigates on this episode of Night Science.
Read: The latest edition of The Murff Papers, which is geopolitical commentary written for the C-suite. If your job is to see the second-order effect before it shows up in the P&L, it’s definitely worth your time. *
*Sponsored by our friends over at 4717: Serious subjects, thoughtfully explored.
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Decision of the day
The sexily-named General Conference on Weights and Measures convened in Versailles yesterday (Thursday) to vote on the abolition of the leap second: that awkward, one-second adjustment every few years to keep ultra-precise atomic time synced with the Earth’s wobbly rotation. Imagine it as the paper wedge under the wonky table of timekeeping.
Since the leap second’s introduction in 1972, we’ve used it 27 times, but it keeps throwing computer networks into disarray: social media platforms, stock markets, airlines. So tech engineers have now collectively decided a global server meltdown isn’t worth keeping clock time in exact lockstep with the sun.
That means from May 2027, timekeepers will simply let atomic and astronomical time drift apart by up to a full hour (over the course of a thousand years). Sounds like a good excuse next time you’re late to the ambassador’s puppet show.
Friday quiz
Were you paying attention to this week’s Intrigue?
2) The former president of which country announced he's forming a new armed rebel splinter group?
3) French outlets are reporting a mysterious ailment affecting intel operatives in which capital?