Tuesday, October 13, 2026 · 5 min read
Together with
The boss of Broadcom, one of the biggest chip suppliers in the AI boom, says a lot of AI investors "have no clue what they are investing in." Chip stocks in Seoul and Tokyo slid on Tuesday.
The IMF has run an AI crash through the world's banks, and more of them came out weak than last year.
Let Meerkat explain.
Broadcom's boss calls it a casino
The IMF crashes AI on purpose
Mortgage rates at a three-year high, in one chart
CPI, Anthropic's investor day and TSMC ahead
SCOREBOARD
NVIDIA | MICROSOFT | ALPHABET |
META | AMAZON | ORACLE |
S&P 500 | NASDAQ | VIX |
Monday close. S&P down 0.1%, with Oracle and Nvidia lower and Meta up 3.4% on its new AI models. On the week: Nvidia −5.3%, S&P +0.4%, Nasdaq −0.8%. Prices via CNBC.
ON WATCH
Broadcom's boss calls it a casino
Broadcom's chief executive, Hock Tan, told a conference in Singapore on Monday that "a lot of investors have no clue what they are investing in." He said they set "very extreme expectations only to find out that it's almost like they are in a casino."
Broadcom designs custom AI chips for Google, OpenAI, Anthropic and Meta, and expects its AI chip sales to reach about $230 billion in fiscal 2028. So the warning comes from one of the biggest sellers in the boom.
Tan said the biggest limit on AI now might be capital, more than chips, memory or power. Intel's boss, Lip-Bu Tan, on the same stage, said people will want a return on the spending.
Broadcom is part of that money story itself. Anthropic's IPO filing shows Broadcom agreeing to lend it up to $42 billion, convertible into shares, to lease chips Broadcom helps design.
Asian chip stocks slid on Tuesday, with worries about AI financing and a Chinese memory rival in the mix. SK Hynix fell more than 8% in Seoul and Samsung 7.9%.
Then again, Tan thinks the demand is real. He said "there is more demand for compute infrastructure than we can supply," and expects that to last through 2029.
MEERKAT'S TAKE: A casino warning from the house is rare enough to take seriously. Tan still expects to sell every chip he can make. What worries him is the people betting on what those chips will earn.
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THE MACHINE
The IMF crashes AI on purpose
The IMF's twice-yearly Global Financial Stability Report, out Tuesday, puts the world's big banks through a made-up disaster. The scenario is an AI crash, a jump in government bond yields and an economic slowdown, all at once.
Under it, banks holding 22% of global banking assets end up with weak capital, up from 18% in last year's test. That's 110 banks, against 88 last time.
Let Meerkat translate. "Weak" means a bank's safety cushion, the money that soaks up losses, drops below a set line under stress, and it doesn't mean the bank fails.
The IMF also says the giant cloud companies now make up 10% of global investment-grade bond sales, up from under 1% in 2024. It warns that "the consequences of an AI correction could be global."
The bull case is that, overall, the IMF's models found bank capital held up even in the AI downturn. Its economists also credit AI spending with keeping world growth above 3% this year.
QUICK PAUSE. WHY SHOULD YOU CARE? Banks hold most people's wages and savings, and they lend to the firms building data centres. If an AI slump dented them, you'd feel it as tighter credit, from car loans to small-business overdrafts.
SOMEONE SMART SAID
Our experiments suggest that small AI models may be months away from being capable enough to self-replicate on commercial internet-of-things (IoT) devices.
Anthropic's Frontier Red Team, the people paid to find the scary stuff first, published this on Monday. Their worry is an AI "worm" that copies itself onto cheap gadgets, like smart ovens and off-brand TV boxes, with no data centre anyone can switch off.
To show it can work, they ran an open model across 15 TV boxes costing about $55 each. In a simplified test, one open model, GLM-5.2, spread to all eight test machines in four of five runs, and they expect small models to reach that level by the end of this year.
They say the test made the hacking step trivial, so it's an upper bound. That's small comfort, since past botnets got in with nothing cleverer than factory-default passwords.
THE CHART
Your mortgage meets the AI boom
Freddie Mac 30-year fixed average (FRED), as of 8 Oct 2026
The average 30-year US mortgage rate hit 7.40% last week, Freddie Mac says, the highest since November 2023. At the end of August it was 6.66%.
The Fed's September minutes said "surging AI-related investments were contributing to inflation pressures." On Monday, Cleveland Fed president Beth Hammack said "a restrictive monetary policy stance is appropriate," and traders put the odds of a December hike near 88%, per CME FedWatch via CNBC.
On the other hand, the chart's own history puts this in context. Rates topped 8% in 2000 and hit 7.79% in October 2023, so today is high but not new.
WHAT TO WATCH: If Wednesday's inflation report comes in hot, a December hike looks likelier and mortgage rates have less room to fall. If it cools, some of that pressure comes off.
HEADS UP
UK minister says an AI cyberattack is "likely" · Kanishka Narayan said a breach like OpenAI's Australian Medicare incident "seems likely, if not inevitable" in Britain, and promised safety testers earlier access to new models.
IMF chief: AI is a "slow-moving tsunami" for jobs · Kristalina Georgieva says young graduates are first in line, and the IMF expects about 40% of jobs worldwide to be "augmented, downgraded or eliminated."
Meta launches Muse Wonder · Its first "frontier" models, which Meta says match OpenAI and Anthropic on its own benchmarks. Meta's stock rose 3.4% on Monday.
Microsoft unveils its Maia 300 chip · Microsoft says it'll mainly run its AI requests on its own silicon, leaning less on Nvidia. Production starts in 2027.
Anthropic says it's blocking most copycats · New defences cut the data harvested by "distillation" attacks, rivals copying Claude through fake accounts, by around 90 to 99%, Anthropic says.
ON THE HORIZON
When (ET) | What |
|---|---|
Tue 13 Oct · before the open | JPMorgan and Goldman Sachs third-quarter results |
Wed 14 Oct · 8:30am | September CPI, the inflation report the Fed is waiting on |
Wed 14 Oct | Anthropic's pre-IPO investor day, San Francisco (reported) |
Thu 15 Oct · 2:00am | TSMC third-quarter results; it guided to $44.6 billion to $45.8 billion of revenue |
Wed 28 Oct · 2:00pm |
MEERKAT ON YOUTUBE
Oracle Just Started The AI Collapse! The flagship data centre of the AI boom is sitting dark in the New Mexico desert, waiting on a gas pipe. Meerkat explains why Oracle's legal notice over the rent is the first real crack, and why it came from inside the building. Watch on Meerkat Explains.
THE BURROW
Quick vote. Broadcom's boss says a lot of AI investors are behaving like they're in a casino. Is he right?
Broadcom's boss says a lot of AI investors are behaving like they're in a casino. Is he right?
Trivia. In 1965 an engineer predicted the number of components on a computer chip would keep doubling at a steady pace. He later co-founded Intel. Who was he? Answer's at the bottom of the email. No peeking.
ALSO WORTH YOUR INBOX
The daily crypto brief from the same burrow. Crypto Nutshell is Bitcoin, the news and the numbers in a five-minute read.
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TRIVIA ANSWER
Gordon Moore. His 1965 article predicted a doubling every year, which he later revised to every two years, and the prediction became known as Moore's law.