The AI Trade Gets Spooky

The tech sell-off continues as Intel and Amazon earnings stoke more fear around the AI trade. Plus, Democrats turn to an old playbook in their bid to retake control of Congress, running more candidates with military experience, and with chocolate prices on the rise, could an alternative, just as tasty. It's not going to fool anyone as either dark or milk chocolate. It's not bad, but it doesn't taste like the real thing, quite like it anyway. However, in the form of chocolate covered almonds, it was fine. And if you put it into a cookie as a chocolate chip, you might not be able to tell the difference. It's Friday, October 30th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Bitcoin and other cryptocurrencies are trading lower this morning. After Binance said it's investigating what appears to be the biggest cyber-heist in history, with hackers making off with more than $6 billion. Cybersecurity researchers have told the Journal that the highest appears to have been conducted by a hacking group called Trader Trader in North Korea, and here with more, is Journal reporter Alexander Asapovic. Alex, what do we know about this so far? By now, multiple cyber security and blockchain analysis firms have penned this on the North Koreans. It appears that at least one of the reasons why they believe that this was carried out by the North Koreans is that some of the funds taken from Binance were commingled with funds from a previous hack that was also attributed to North Koreans. Alex, we should note here that Binance suspended transactions yesterday, and the exchange's founder has said that user funds are safe. The exchange also said that its US arm isn't affected by the security incident. What does all that mean for users? The good news is that a portion of the funds that were stolen from Binance appeared have been frozen. If you have crypto in what is called staple coins, such as Tether or Circles USDC, the issuer of the staple coin can freeze the funds to prevent further movement to them. The numbers currently are that the total size of the fund stolen was about $6.3 billion, and the amount frozen is about $3 billion, which obviously leaves some funds still in the hands of the hackers. Just stepping back, Alex, are exchanges particularly vulnerable at this moment? Crypto exchanges have been hit with hacks for a very long time. The difference now is that just within the past year to the state-sponsored hacking groups that, or believed to be connected to North Korea, have gotten very ambitious and sophisticated and carried out a number of big, big hacks. At the same time, there's also concern about AI and the use of AI cyber tools to hack crypto exchanges. To be clear, it's not clear that that's what happened here, but it is a growing concern in the crypto industry. I would point out that yesterday, before the Binance hack emerged, a polymarket, the popular crypto-based prediction market was also hit with a hack. The amount was less than $3 million, but nonetheless it also drew attention to this issue. That was General Reporter Alexander Asapovic, and we should note that Polly Market has a data partnership with Dow Jones, the publisher of the Wall Street Journal. Officials in the US, Singapore, and Taiwan suspect that a data center executive with close ties to Nvidia CEO Jensen Huang is a Chinese intelligence source. Last year, US officials concluded that Beijing had recruited Chinese citizen Alice Huang, while she worked at mega-speed international, which was working with Nvidia to build data centers in Asia. The whereabouts of the executive who isn't related to the Nvidia CEO are unclear. The Chinese embassy in Washington firmly rejected the allegations, a spokesman for Nvidia. So the company was confident that the US government would flag if any person was a threat to American industry, noting that the CEO's relationship with the executive is not unusual, given their business ties. Shares of Intel have plunged more than 25% off hours, setting up another jittery trading session on Wall Street on the heels of yesterday's alphabet stock route, which saw the tech giant shed half a trillion dollars in market value. Intel reported disappointing third quarter results, citing supply chain constraints following an incident at a factory in Israel and pressure on its personal computer division, driven by the stubbornly high price of memory chips. A trend that CFO Dave Zinser predicted would dent the company's total addressable market. You know, make no mistake, we are not optimistic about next year in terms of memory. You know, we think that it is going to impact the the TAM. We think TAM will be down 10% on a unit basis next year, and then we'll, you know, have to see in 28, you know, whether things improve, but our expectation is that it does not improve in 27. Well, also dropping off hours are shares of Amazon, which are down around 7%. The online behemoth saw its net income total $20 billion for the quarter and reported its biggest cloud growth in years. Though analysts say that investors had hoped for even more acceleration in the company's AWS division, Amazon's free cash flow is also declining as a target's $220 billion in spending this year largely to build AI data centers. And CEO Andy Jassy acknowledged that is a big number. Would it be more convenient if this type of acceleration and opportunity happened over 25 years, and you could spread the catbacks over 25 years? Yeah, it might be more convenient, but that's not the world that we live in, and that's not the opportunity. We, we can fund this plan. And I think it will forever change the size of Amazon. Amazon shares are roughly flat over the past year. Well, pleasantly surprising investors overnight would be EV Maker Rivian, which uptits guidance on around a 50% increase in quarterly vehicle deliveries. The California Bay startup is still losing money, though, with analysts projecting that it won't turn a profit until 2030, assuming it can boost sales to 375,000 vehicles. The company delivered almost 20,000 EVs in a latest quarter. It is a complex time to be selling video games, despite narrowing its losses. Shares of Roblox have fallen 17% overnight as the gaming platform popular with kids reported declining user and engagement metrics. Earlier this year, Roblox was ordered to revamp its child's safety policies following an April agreement with Nevada's attorney general. On the upside, execs said that AI-generated games and assets were performing well and driving loads of new content onto the platform. Just in time, though, for the most hotly anticipated game in years, Grand Theft Auto 6 to launch next month, a variable that CFO Navine Chopra said was practically impossible to control for. There really is not a lot of data or analogous releases by which to try to estimate the impact that GTA may have. This is a pretty different demo than what we have on the platform today. Obviously, that'll change over time. It is a console-only release. And so, we don't really know what to expect, but we've tried to be prudent, and as I said, build in a little bit of Edwin there. And it's earnings morning for some of the world's biggest oil companies. BP has kicked things off with a splash, reporting soaring third-quarter profits and a jump in cash flow that's enabling it to pay down its debt. Those results come as CEO Meg O'Neill has sought to shore up the company's balance sheet and take a stricter approach to spending. BP shares are moving higher on the news. And Exxon Mobile and Chevron are set to follow with their own reports this morning for analysis of their results and other market updates throughout the day, tuned back in for the PM edition of What's News this evening. And in other heads up, we've got a special bonus episode coming later today. It's the latest What's News in earnings, in which we'll be looking at how UPS and FedEx aren't just surviving the era of high diesel costs, but thriving. That'll be right here, your What's News feed at midday. Coming up National Politics reporter Kent Thomas will check in from the campaign trail as moderate Democrats put swing districts in play. And we'll look at just how spooky Halloween candy budgets have become. Stick around. As Democrats bid to take back control of Congress, much of the focus this year has been on left-wing candidates upsetting members of the Democratic establishment. But as the journals Kent Thomas reports, a cohort of candidates taking inspiration from the Lady Helcats who integrated the Marines in World War One are taking a much more moderate tack. And Ken joins us now from the campaign trail in Nebraska with more on this. Ken, I'm glad we're covering this because so much of the attention in recent months has really been on a very different segment of the 2026 Democratic candidate pool. Yeah, we spent a lot of time this summer talking about the Democratic Socialists who won their primaries in very blue, mostly urban districts. Now there's a real focus on Democrats electing these more moderate members who are competing in these very purple districts that will determine control of the House. But at the same time, a lot of these districts are very competitive. And so Democrats have turned to a lot of candidates who have military experience, namely a group called the to Hellcats that includes Joanna Mendoza of Arizona, who's a Marine Corps veteran, Kate Conley of New York. She served in the Army and Rebecca Bennett of New Jersey. She's a former Navy helicopter pilot. They have all worked together and gotten to know each other. And they're running as military veterans, people who are very much enmeshed in their communities and will bring more of a moderate outlook if they get elected to Congress. Now, this is an approach that Democrats have taken in the past and have had a lot of success. Back in 2018, there were these members called the squad who got elected people like Alexandria Ocasio-Cortez, Ayana Presley, Rashida Talib. But at the same time, Democrats were also successful in electing a number of former military veterans, people who are very similar in their backgrounds to this group called the Hellcats. And so there has been success there in the past. And I think Democrats see this as another way to win back control after being in the minority. Can besides these candidates' biographies, what exactly are they campaigning on? Yeah, I spoke with Rebecca Bennett and Kate Conley. And they said, look, the name of the game in this cycle is affordability. People are struggling to get by. They're dealing with high inflation. They're dealing with gas prices that many places have topped $5 a gallon. Diesel is even higher. And so these candidates are all about making sure that Americans can afford their lifestyles. And they want that to be the focus if they are able to get into the house. I think there will be a big push to make health care more affordable if they get elected to push back on these tariffs that the president has pushed certainly in Canada of late. And so you're not hearing a lot of social issues, cultural issues in these races. This is really about pocketbook issues and trying to get costs down for Americans. And can obviously the focus for Democrats now is trying to retake control of Congress. But come January, should some of these more moderate Democrats win next week, they will be just as much members of the Democratic caucus as their colleagues on the progressive left. Where might that leave the party in the next Congress? - Yeah, this could certainly be a preview of some of the friction we may see if Democrats are able to win back the House. On one hand, you're going to have very progressive members who won their primaries this past summer and are assured of their seats in Congress. They're going to really want to push the envelope. They are pushing for things like Medicare for all defunding ICE, those kinds of policies that don't necessarily work in some of these more suburban districts where the House is often won or lost. So some of these more moderate candidates are going to want to make sure that there's a real focus on these pocketbook issues. I think another issue will just simply be impeachment. It's very easy if you are representing a deep blue district to call for the impeachment of President Trump. Again, I think you certainly could see a push to impeach just some cabinet members. There's been a lot of talk focused on defense secretary Pete Hegseth. But this is not the type of thing that if you're a moderate candidate, you're going to want to be involved with. The fear will be that that will take you away from these affordability issues. - I have been speaking to Wall Street Journal. National political reporter Ken Thomas. Ken, thank you so much for, in this case, literally pulling off the campaign trail for us. - Good to be with you, thanks. - And finally, we've got a PSA for anyone buying last minute Halloween candy on the way home from work today. - I went to the grocery store and I noticed that my favorite dark chocolate bars cost about twice what they did before the pandemic. - That's columnist Christopher Mims who says that Halloween candy prices are up more than 70% in the past five years. - And then I looked into it and it turned out that due to extreme weather, cocoa prices are through the roof and this has been true for a while. It's a combination of factors. One of them is climate change and severe weather. So a series of droughts and floods have wiped out a lot of the crop in Africa where cocoa trees grow. But in addition, there's just been years of mismanagement mostly by the governments of the countries where cocoa trees grow. And so as a result, there's a lot of subsistence farmers who just can't make enough money to improve their growing practices and expand the crop. - So that's the trick. But Christopher says there could still be a treat thanks to what confectioners are cooking up in the lab. - In the future, it looks like we are going to have a world where maybe for premium chocolate, if you can't get it from the trees, you might get it literally from a vet. So lab-grown cocoa cells will be processed into chocolate and it will be a bio-identical chocolate to what we know and love, but it will have never grown in a tree. On the other end of the price spectrum, so you're talking about chocolate candy or the chocolate chips in a cookie that might come from chocolate substitutes. So things like grape seeds that are roasted to taste like chocolate. And that's it for what's news for this Friday morning. Today's show was produced by Hattie Moir, our supervising producer was Daniel Pock and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a news show. Otherwise, have a sweet weekend. Thanks for listening. (upbeat music)