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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: This is the Bloomberg DAYVAC podcast. Good morning, It's Friday,

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Speaker 2: the thirteenth of February. I'm Caroline Hepgat in London and.

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Speaker 1: I'm Stephen Carolin Brussels. Coming up today, a former karaoke

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Speaker 1: company drags the logistics industry into the AI scare trade.

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Speaker 2: Hungary's opposition leader accuses Victor Auban of using a sex

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Speaker 2: tape of a consensual encounter to smear him.

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Speaker 1: And four years on from Russia's full scale invasion, the economic,

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Speaker 1: political and security fallout is reverberating far beyond Ukraine's borders.

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Speaker 3: Let's start with a roundup of our top stories.

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Speaker 1: Yet more companies are being caught up in the so

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Speaker 1: called AI scare trade. Logistic stocks plunged on Wall Street

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Speaker 1: triggered by a former karaoke company's announcement of a new

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Speaker 1: platform algorithm, is only worth a tiny fraction of the

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Speaker 1: value that was erased from a constellation of large companies,

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Speaker 1: with the Russell three thousand Trucking index tumbling by six

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Speaker 1: point six percent. The sharp move lower follows weeks of

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Speaker 1: mounting anxiety over AI's impact across multiple sectors with concerns

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Speaker 1: now showing signs of morphing into a broader reassessment of risk.

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Speaker 1: Asian stocks followed. US index is lower, while traditional safe

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Speaker 1: haven assets including gold, copper, and silver also declined. Sharply

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Speaker 1: Motley Fool Asset Managements Shelby McFadden says this marks the

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Speaker 1: next stage of the AI cycle and that it is

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Speaker 1: unfolding faster than she expected.

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Speaker 4: Now we're starting to even think about labor implications, which

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Speaker 4: I myself didn't think the market would start to consider

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Speaker 4: for maybe another couple of months. So seems that now

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Speaker 4: maybe some investors are doing a little bit of a

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Speaker 4: spiral where it's how many things does this touch? Is

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Speaker 4: this a sort of splatter where we need to look

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Speaker 4: all around the room and find all the different places

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Speaker 4: that there is this sort of AI residue. Seems to

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Speaker 4: me that that's the market's conclusion right now.

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Speaker 1: McFadden added that she s's Legit sticks and consultancies as

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Speaker 1: among the more inefficient sectors at risk. The latest market

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Speaker 1: ructions come as Anthropic announced it has completed a thirty

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Speaker 1: billion dollar funding round at a three hundred and eighty

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Speaker 1: billion dollar valuation. The firm's technology, including coding agents and

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Speaker 1: tools that automate enterprise work tasks, has been at the

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Speaker 1: heart of recent selloffs that have shaken global markets.

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Speaker 2: US President Donald Trump is reportedly looking to scale back

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Speaker 2: tariffs on steel and aluminium goods. The Financial Time says

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Speaker 2: the White House is looking at introducing more targeted measures

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Speaker 2: as a way to combat the cost of living.

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Speaker 3: Blue Makes James Walcock has.

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Speaker 5: More Republicans are growing anxious. Earlier this week, the House

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Speaker 5: of representstives pass to build directly targeting the president's tariffs

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Speaker 5: on Canadian imports. It's this growing nervousness about the cost

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Speaker 5: of living and upcoming midterms that are the background to

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Speaker 5: the ft story. The paper site's three unnamed sources saying

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Speaker 5: White House trade officials were worried hurting consumers by hitting

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Speaker 5: the prices of food and drink. Scans countries including the UK,

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Speaker 5: Mexico and Canada, as well as EU members could stand

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Speaker 5: to benefit from any easing. In London, James Wilcock Bloomberg.

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Speaker 1: Radio Goldman Sachs top lawyer, is leaving the firm following

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Speaker 1: the release of documents highlighting her links to sex offender.

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Speaker 1: Jeffrey Epstein, CEO David Solomon announced that Kathy Romner will

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Speaker 1: step down at the end of June, adding that he

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Speaker 1: respects her decision to resign and that she would be missed.

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Speaker 1: Bloombrook's finance reporter Harry Wilson says the revelations from the

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Speaker 1: Epstein files are likely to keep coming.

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Speaker 6: What we're seeing is a whole host of people around

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Speaker 6: the world, often very wealthy, very influential people, being caught

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Speaker 6: up in this, I guess ever growing scandal, which is

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Speaker 6: that they in some way have either had linked connections,

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Speaker 6: were close friends associates of Jeffrey Epstein, and those relationships

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Speaker 6: now are getting exposed in a very public and a

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Speaker 6: very damaging way for them.

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Speaker 1: Our port Harry Wilson, referring there to others mentioned in

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Speaker 1: the documents, including former US Treasury Secretary Larry Summers and

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Speaker 1: attorney Brad Karp. The bank said that Rumler disclosed to

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Speaker 1: its leadership at the time that she had previously dealt

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Speaker 1: with Epstein, who had offered to use his network to

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Speaker 1: help her build her private practice. In a statement, Romner

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Speaker 1: said her responsibility is to put Goldman Sachs interests first.

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Speaker 2: Hungary's opposition leader Peter Maya has said that he was

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Speaker 2: secretly take having sex and has accused the government of

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Speaker 2: trying to blackmail him ahead of key elections. Maya's Teaser

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Speaker 2: party has a wide lead in polls over the incumbent

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Speaker 2: Victor Alban who has been in power for sixteen years.

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Speaker 3: After rumors of the sex tape appeared.

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Speaker 2: In Hungarian media, the opposition leader said that he was

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Speaker 2: the victim of blackmail.

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Speaker 7: I was on as you so so shall you reap?

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Speaker 7: You will not be able to intimidate or blackmail me.

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Speaker 7: Russian secret service help and a flood of fake videos

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Speaker 7: will not be enough. Destroying my family will not be

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Speaker 7: enough either. The vast majority of Hungarian people see through

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Speaker 7: the Aorbang government's lies and in humanity.

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Speaker 2: Peter Mayav speaking Varra translator in an online video address

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Speaker 2: that the politicians subtitled into English. A spokesman for ubanns

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Speaker 2: FIDE's party said in a Facebook post that Maya's comments

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Speaker 2: implied the politician had been misleading the public. The alleged

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Speaker 2: sex tape is the latest scandal in the country's dirtiest

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Speaker 2: selection campaign to date. Ahead of a vote in April, the.

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Speaker 1: UK's Defense Secretary John Healey says allies have pleased as

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Speaker 1: much as thirty five billion dollars in new military aid

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Speaker 1: for Ukraine. He says Western countries have never been more

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Speaker 1: determined to end the war.

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Speaker 8: We will step up military assistance to Ukraine, we will

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Speaker 8: step up pressure on Russia, and we want to make

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Speaker 8: twenty twenty six the year this war ends, the year

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Speaker 8: we secure peace.

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Speaker 1: Heally and other European defense ministers are rushing to shore

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Speaker 1: up the war battered country as Moscow's full scale invasion

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Speaker 1: approaches its four year mark. Washington has effectively ended its

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Speaker 1: financial aid to Ukraine since President Trump returned to OFFUS

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Speaker 1: with peace talks stalled. Months of Russian air strikes have

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Speaker 1: left millions of Ukrainians to endure winter without steady light

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Speaker 1: or heat.

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Speaker 2: And now to a people and Pay story, Jane Fraser

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Speaker 2: now sits among the highest paid banking executives in the

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Speaker 2: US on Wall Street Stephen that's after Citygroup boosted her

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Speaker 2: pay by twenty two percent.

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Speaker 3: Bloomberg's Adebayo has more forty two million dollars.

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Speaker 9: That's how much City Group CEO Jane Fraser is set

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Speaker 9: to take home in her twenty twenty five package. The

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Speaker 9: upgraded total follows a sixty six percent surge in stock,

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Speaker 9: more than any other Wall Street bank, and puts her

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Speaker 9: total compensation just one million dollars behind JP Morgan, Magnate,

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Speaker 9: Jamie Diamond. Included in the bump is a one point

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Speaker 9: five million dollar base six point one million dollars of

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Speaker 9: cash incentive, and the rest in stock awards. Phraser's increase

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Speaker 9: is yet another sign of confidence from the board in

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Speaker 9: her leadership as she attempts to turn the bank around

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Speaker 9: after years of lagging its peers. The move comes after

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Speaker 9: salary upchecks across Wall Street as firms including Goldman Sachs,

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Speaker 9: Morgan Stanley, and JP Morgan op to Boo CEO Rewards

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Speaker 9: in London to added Bay Bloomberg Radio.

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Speaker 2: And those are our top stories for you this morning.

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Speaker 2: In terms of the markets, Asian stocks are lower and

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Speaker 2: the sell off is deepening after we also saw an

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Speaker 2: ai field sell off in the US yesterday. You got

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Speaker 2: the hang Saying Index down two percent this morning. Ten

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Speaker 2: year treasury yields saw six basis points a move lower

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Speaker 2: yesterday because of sort of a haven driven surge. This morning,

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Speaker 2: we traded at four eleven, so up about a basis

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Speaker 2: point right now, your pinstop futures clinging onto the green,

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Speaker 2: not so for the we're in the red there and

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Speaker 2: gold and bitcoin this morning are both nodging high Goalsop

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Speaker 2: seven tenths Stephen.

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Speaker 1: In a moment, we'll bring you more on the winners

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Speaker 1: and losers in the latest AI disruptions sell off, plus

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Speaker 1: how four years of war in Ukraine has changed Europe.

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Speaker 1: But another story that we've been reading this morning, humans

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Speaker 1: coming to the rescue of technology, flipping the narrative on

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Speaker 1: its head that perhaps we've talked about more recently. This

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Speaker 1: is the self driving car start of a Weimo finding

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Speaker 1: a solution to one of tech's newest problems. What happens

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Speaker 1: if someone leaves the door of a robotaxi open, preventing

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Speaker 1: it from leaving. Wenol has a solution, get a nearby

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Speaker 1: delivery driver to close the door. A driver in Atlanta

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Speaker 1: recently received a door dash offer, paying eleven dollars and

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Speaker 1: twenty five cents to close an open Weimo vehicle door.

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Speaker 1: They posted about it on Reddit. The two companies have

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Speaker 1: confirmed this is a new partnership that didn't say who's

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Speaker 1: paying exactly, rather whether it's Weimo that's paying these drivers

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Speaker 1: to do it might only be a temporary though. Waymos

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Speaker 1: says that its future vehicle platforms will have automated door closures,

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Speaker 1: which sounds even more terrifying.

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Speaker 2: Yeah, that's a bonker's story, isn't it. Weimo autonomous vehicles

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Speaker 2: they're coming to London.

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Speaker 3: Of course.

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Speaker 2: I'm also interested at how quickly the number of autonomous

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Speaker 2: rivalists cars is actually going up. Benef talking about robotaxis

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Speaker 2: going from eight thousand to eighteen thousand this year. So

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Speaker 2: you know, maybe it's a problem we'll run into a

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Speaker 2: bit more often. Yeah, I need somebody to shut the

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Speaker 2: door after me. Thank you very much to.

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Speaker 1: Sort of service you like to become accustomed to, I think,

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Speaker 1: Caroline well, from humans helping out technology to the acts

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Speaker 1: that some technology is causing human Investors fears of AI

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Speaker 1: disruption and sectors from commercial property to logistics, sparking another

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Speaker 1: sell off on Wall Street, but their losses may be

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Speaker 1: asias gain, where chip makers are benefiting from the increased

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Speaker 1: use of AI. Our executive edger for Asian markets, Paul

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Speaker 1: Dobs and joins us now for more. Firstly, Paul, this

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Speaker 1: is an improbable sentence, but perhaps you can explain how

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Speaker 1: a former karaoke company turned to AI and have now

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Speaker 1: caused this massive sell off on markets.

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Speaker 3: I don't think it's got anything to do with closing doors.

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Speaker 10: Morning Stephen, though, but the robots are coming for all

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Speaker 10: of our jobs, sooner or later, it would seem. I

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Speaker 10: don't entirely know how this story all fits together, but

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Speaker 10: the company that used to be focused on karaoke at

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Speaker 10: some point in the last couple of years changed and

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Speaker 10: decided to go all in on freight logistics instead. I

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Speaker 10: realized that it had AI tools that would make that

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Speaker 10: process a lot smoother and easily scalable relative to some

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Speaker 10: of the existing companies that are doing similar things out there.

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Speaker 10: And you know, the market is in such a fragile

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Speaker 10: sort of state of mind at the moment, given the

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Speaker 10: other sell offs we've seen in various industries where it's

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Speaker 10: looked like AI could do those high labor intensive, high

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Speaker 10: cost jobs at a fraction of the cost. You know,

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Speaker 10: each different sector in turn is facing a little bit

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Speaker 10: of a come upance where people are realizing, well, this

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Speaker 10: is another thing that maybe AI can do, and so

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Speaker 10: maybe the companies that are doing it don't deserve the

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Speaker 10: valuations they've currently got. So I think that this one

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Speaker 10: if you look at some of the comments that we

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Speaker 10: have in the story, which are quite good. Even the

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Speaker 10: CEO of the company can't believe it. He's talking about

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Speaker 10: a David and Goliath moment, him being the David very much.

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Speaker 10: But some of the other commentary is more along the

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Speaker 10: lines of don't know if this is actually going to

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Speaker 10: be the company or the thing that blows up entire industries,

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Speaker 10: but you know, the signaling or the message or the

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Speaker 10: direction of travel is clear that more companies are going

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Speaker 10: to have their business models questions. Is the power of

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Speaker 10: AI is tapped and exploited?

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Speaker 3: Yeah, isn't that interesting.

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Speaker 2: Everyone's trying to pick this story apart and understand it.

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Speaker 3: For starters.

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Speaker 2: There are winners though, and topics, massive new funding round

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Speaker 2: shows that doesn't it come Copanies providing infrastructure for AI

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Speaker 2: are doing well, and actually a lot of them are

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Speaker 2: in Asia.

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Speaker 10: Yeah, that's right, Caroline. So I've been banging on about

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Speaker 10: this a few times on your shows recently, just the

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Speaker 10: outperformance that we've seen in the Asian market relative to

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Speaker 10: the US in particular. So the S and P turned

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Speaker 10: negative here to date, yesterday, the Asian equivalent is up,

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Speaker 10: you know, more than ten percent even with today's setback.

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Speaker 10: And the thing is it's about whereabouts your position within

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Speaker 10: the sort of AI value chain. And as you were saying,

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Speaker 10: a lot of the companies that are making the equipment,

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Speaker 10: the chips, the hardware that goes into the AI companies

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Speaker 10: that are then you know, like anthropic building out their

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Speaker 10: data centers and scaling up in order to do the

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Speaker 10: things that threaten those businesses, like the karaoke companies doing

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Speaker 10: a lot of them are based in Asia, right, and

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Speaker 10: we know about that when we know about how strong

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Speaker 10: and dominant they are in South Korea, Samsung and ske Heinis,

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Speaker 10: you know, like narly half the market in Taiwan, t

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Speaker 10: smcs absolutely dominant as well, and they're so they're a big,

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Speaker 10: powerful sort of holding within the broader Asia index. And

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Speaker 10: so that's allowing for that sharp out performance that we're

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Speaker 10: seeing and a lot of well it doesn't even take

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Speaker 10: a lot of cash, but some cash flowing out of

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Speaker 10: the US market into the rest of the world is

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Speaker 10: certainly seeing out performance relative to what's going on with

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Speaker 10: the S and P at the moment.

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Speaker 1: But thinking about where the story goes from here, Paul,

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Speaker 1: I mean, our investor is getting any more use to

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Speaker 1: what one strash has described as these AI land mines.

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Speaker 10: I'm not sure that we know exactly how to deal

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Speaker 10: with it yet, Stephen, is the is the honest answer.

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Speaker 10: I think that what we did see with some of

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Speaker 10: the companies, like the financial services ones that got that

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Speaker 10: had a big sell off maybe a week or ten

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Speaker 10: days ago, bounce back pretty quickly as well. So it's

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Speaker 10: more like the knee jerk is oh gosh, I don't

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Speaker 10: really just don't know how severe this is. And then

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Speaker 10: when you get to evaluation level the people prefer it,

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Speaker 10: it does seem to be that the market kind of

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Speaker 10: finds a way to adjust to that pretty quickly. But

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Speaker 10: I do think, yeah, like you said, that, we're getting

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Speaker 10: to this point where there's going to be more of

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Speaker 10: those kinds of things. I think the other thing to

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Speaker 10: note is, you know that funding round that you were

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Speaker 10: talking about for Anthropic shows the humongous demand from everybody

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Speaker 10: to try to get into these not yet listed companies

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Speaker 10: and the huge valuations that they're able to demand before

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Speaker 10: going to market because of the opportunities that they offer.

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Speaker 2: Okay, Paul, Thank you so much for being with us

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Speaker 2: this morning. That is Paul Dobson, our executive editor for

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Speaker 2: HIA Markets. Thanks stay with us. More from Bloomberg daybaqube

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Speaker 2: coming up after this.

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Speaker 1: It's been almost four years since Russia began its full

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Speaker 1: scale invasion of Ukraine. The war has devastated Ukrainian cities,

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Speaker 1: claimed hundreds of thousands of lives, and forced more than

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Speaker 1: ten million people to flee their homes. The effects the

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Speaker 1: conflict have been felt across Europe, and our reporters have

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Speaker 1: been looking at the economic, political, and security fallout as

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Speaker 1: leaders gather for the Munich Security Conference. Our senior editor

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Speaker 1: Alan Crawford joins us now from Munich for more. Alan,

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Speaker 1: good morning. This war has changed so much in Europe.

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Speaker 1: Billions are being poured into defense for the first time

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Speaker 1: in decades. What's been the scale of that, Mark, Stephen.

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Speaker 11: I mean, we tend to think in terms of that

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Speaker 11: Europe's not doing enough and individual countries are not pitching off,

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Speaker 11: and in terms of help for Ukraine or even spending enough.

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Speaker 11: But it's worth looking at how far we have actually

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Speaker 11: come that. Remember before the fuel scale invasion for years back,

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Speaker 11: twenty twenty two, then many countries in Europe were spending

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Speaker 11: way below the two percent threshold of GDP on defense,

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Speaker 11: and now after pressure from Donald Trump, they're committed to

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Speaker 11: spending five percent. And I mean I remember, for example,

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Speaker 11: one of the stars in Germany of the defense and

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Speaker 11: rhine metal that they used to essentially keep their head

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Speaker 11: down and try not to publicize themselves because the you know,

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Speaker 11: armaments were unpopular. I remember even when I first looked

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Speaker 11: at them, then they were promoting things like the fact

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Speaker 11: that they had bees on the roof and they were

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Speaker 11: selling their own honey. And now of course they're they're

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Speaker 11: one of the stars. The stock is up like sixteen

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Speaker 11: hundred percent since then. It's worth saying Ukraine is producing

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Speaker 11: vast amounts of its own weaponry. And of course the

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Speaker 11: nature of warfare has been completely revolutionized with these kill

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Speaker 11: zones at the front, with drones. I myself witnessed in Kiev,

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Speaker 11: these remotely operated tracked vehicles which now service troops at

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Speaker 11: the front. So I mean, it's everything has been turned

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Speaker 11: on its head.

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Speaker 2: I remember last ye, so speaking to a defense industry

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Speaker 2: companies Alan concerned about getting access to talent, you know,

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Speaker 2: to feed that pipeline. So it is dramatic the change.

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Speaker 2: But also, you know, when we're thinking very big picture,

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Speaker 2: Europe's energy mix is also radically changed, and that's because

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Speaker 2: Russian supplies are being phased out. So there are also

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Speaker 2: huge consequences from that.

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Speaker 11: Surely, absolutely, and this is again an area of where

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Speaker 11: industry is crying out for help because of the rise

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Speaker 11: and the price of energy that Europe's not taking lots

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Speaker 11: of LNG from the US, for example. But again it's

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Speaker 11: I think we should at times stop and look back

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Speaker 11: and realize that Europe was actually facing a real energy

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Speaker 11: crisis when it took this difficult decision to cut off supplies.

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Speaker 11: You can debate the you know how we got there,

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Speaker 11: but nevertheless, the cutoff supplies of fossil fuels and largely

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Speaker 11: and countries like Germany in Europ's biggest economy, of course,

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Speaker 11: cut off gas supplies entirely. And we use this example

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Speaker 11: of this one company as kV P Studity, which is

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Speaker 11: in the former east of Germany on the River Elba,

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Speaker 11: and they suffered, they immediately, they were profitable and suffered

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Speaker 11: three years in the red. And now excuse me that

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Speaker 11: the chief executive is still seeing that it's a matter

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Speaker 11: of the survival for the entire chemical industry in Europe.

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Speaker 1: There are also broader questions being asked about European security,

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Speaker 1: of course, highlighted where you are in that highly critical

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Speaker 1: speech by the US Vice President at Evans at the

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Speaker 1: Munich Cause Security Conference last year. A new EU survey

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Speaker 1: out this morning shows that more than two thirds of

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Speaker 1: Europeans believe that their country is under threat. How has

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Speaker 1: the political conversation around European security changed during this war.

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Speaker 11: It's hard to underestimate the change that it's just it's

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Speaker 11: it's massive. You've got leaders like Fredrich Mertz, the Chancellor

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Speaker 11: of Germany, who is from West Germany, grew up in

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Speaker 11: the under the US security umbrella, and he's now questioning

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Speaker 11: the future of transatlantic relations. I think that will be

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Speaker 11: a theme from later today, incidentally in his speech opening

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Speaker 11: the conference. But you, of course, we just had this

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Speaker 11: Greenland saga where Donald Trump was claiming that the US

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Speaker 11: should control Greenland, which is sovereign Danish territory. We had

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Speaker 11: the National Security Strategy from the US just before Christmas

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Speaker 11: there which it was being very clear and open about

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Speaker 11: the desire the administration's desire to promote right wing, anti immigration,

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Speaker 11: anti EU, anti climate action forces in Europe against the

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Speaker 11: over the established governments. We had tariffs of course globally,

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Speaker 11: but it's worth saying it's not just about the US.

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Speaker 11: Because of China support for Vladimir Putine or at least

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Speaker 11: refusal to join in the sanctions against Russia, then you've

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Speaker 11: seen Europe at once being skeptical and weary of China relations,

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Speaker 11: on the other hand being thrown into bed with Beijing.

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Speaker 11: I mean with Q Stormer there, with Macron there, Carney

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Speaker 11: from Canada, Sanchez, I believe of Spain is going eminently

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Speaker 11: and it's it's a very difficult balancing at that Europe

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Speaker 11: is suddenly finding itself in.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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