Good morning. On Fortune’s radar today:
- OpenAI employee accused of planting secret recording device.
- Houthis strike Saudi Aramco HQ as oil climbs to $106.
- We’re approaching the top of the AI boom, these numbers show.
- Markets: ASML beats expectations.
- The U.S. and France are basically the same place as far as bond yields are concerned.
- What Matthew McConaughey learned after spending a weekend in the desert reading 20 years of his bad reviews.
ONE BIG THING
FBI arrests OpenAI employee accused of planting secret recording device in conference room
In a stunning disclosure, the Federal Bureau of Investigation (FBI) announced Tuesday that it has arrested an OpenAI employee who is a Saudi citizen, charging him with secretly recording conversations in a conference room at the company’s San Francisco offices.
A specialized OpenAI security team—the technical surveillance countermeasures team—first found a recording device on Sept. 30 during a sweep of the conference room, OpenAI told Fortune. The listening device was plugged into a USB port on the back of a television, concealed by a small piece of toilet paper, according to the FBI.
OpenAI contacted the FBI after discovering the listening device, which the company says was sophisticated and designed to evade detection. It had advanced encryption, audio monitoring capabilities, and a mechanism for transferring data.
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THE WAR
Houthis bomb Saudi Aramco HQ in Dhahran
The conflict between Saudi Arabia and the Iran-backed Houthis escalated over the last 24 hours. The Houthis bombed the corporate HQ of Saudi Aramco in Dhahran, Saudi Arabia, on Tuesday, officials said. The Saudi government said that the attack caused a “limited fire.” Aramco did not comment. No fatalities were reported. There was “extensive damage to multiple floors of Aramco’s Tower Administration Building,” the FT said.
The Saudis also intercepted a cruise missile over the Al-Kharj governorate in Riyadh province and a ballistic missile targeting Riyadh, Al Jazeera reported.
The attacks came during the World Petroleum Congress in Riyadh. Executives from ExxonMobil, Chevron, Shell, BP and TotalEnergies abandoned the event, the FT reported, due to the potential danger.
The price of Brent crude oil rose to $106 per barrel this morning.
NUMBER GO FLAT
How we know we’re approaching the top of the AI boom
The combined revenue growth for OpenAI and Anthropic appears to be slowing, according to Ohsung Kwon and the folks at Wells Fargo. That’s a problem given that both of them reportedly plan to launch IPOs. The right-hand chart below shows “reported/rumored” combined annual run-rates for both companies. The law of large numbers appears to be kicking in: While growth is still happening “at a fast pace,” Kwon et al. say, the rate of growth is slowing down:
The left-hand chart offers a potential explanation. While token usage is going up, the cost of them has plateaued. One LLM is much like another for 90% of tasks, and it is likely that heavy-user customers are budgeting toward cheaper models accordingly. “Plateauing spend is concerning for frontier labs,” their recent note said.
On top of that, the market is used to large upward revisions to future capex estimates from hyperscalers. If that reverses—if the revisions get smaller—expect tech stocks to sell off. “If capex estimates don't get revised up by more than 10%, we see that as a risk to AI buildout stocks,” he advised clients.
Kwon is not alone. As these charts from Adrian Cox at Deutsche Bank and Lisa Shalett at Morgan Stanley show, estimated capex growth is about to slow down significantly:
Spending will still be a not-shabby $1 trillion per year. But Shalett said in a note, “Current consensus contemplates a different scenario in 2027, featuring significant deceleration in growth rates [and] could prove a headwind to equities next year.”
THE MARKETS
Europe, U.S. futures rise as semiconductor supplier ASML beats expectations
ASML, the Dutch company that is the only supplier of the “extreme ultraviolet lithography” machines needed to make the most advanced semiconductor chips, reported Q3 profits that beat expectations and said it had customers interested in placing orders through 2030.
- S&P 500 futures were up 0.21% this morning. The index closed flat on Tuesday.
- In Europe, the Stoxx 600 was up 0.48% in early trading, and the U.K.’s FTSE 100 was up 0.22% before lunch.
- Asia: South Korea’s KOSPI was down 0.44%. Japan’s Nikkei 225 was down 0.05%. India’s Nifty 50 was down 0.46%. China’s CSI 300 was down 1.36%.
- Brent crude was $106 per barrel.
- Bitcoin was at $83,330.
Read more here.
CHART OF THE DAY
France’s problem is America’s problem
A lot of eyes are on the French bond market right now as Paris struggles to deal with its national debt. Yesterday we told you Macquarie was pondering whether there might be bank runs in France if the Élysée Palace can't get things under control. And tomorrow ING will host a seminar whose title says it all: “Is France pushing the eurozone into a new sovereign debt crisis?”
But as this chart from Claudio Irigoyen and Antonio Gabriel at Bank of America shows, the French 10-year bond and the U.S. 10-year are basically on the same track.
They got there because they have the same problem: “When interest rates are low, governments have incentives to run bigger deficits financed with cheap debt, especially when the cost of financing is lower than the rate of growth of the economy,” they said in a note. “However, if that ‘cheap’ debt goes to finance a structural increase of the fiscal deficit, when interest rates increase it is politically difficult to implement the necessary fiscal consolidation to put the house in order.”
NUMBER OF THE DAY
-$245 million
The expected loss on the Tom Cruise movie “Digger,” as estimated by Variety. “It will wind up as one of the biggest flops, not just of the year but potentially of all time,” the trade rag said.
THE FRONT PAGES TODAY
Interview: France’s Marine Le Pen gears up for fight with EU - FT
Russia pounds Ukraine’s energy infrastructure, leaving 600,000 without power - CNBC
Bank of America hit with $1.2 billion penalty over money laundering allegations - Axios
Inside Kimberly Guilfoyle’s Final Days as Ambassador to Greece - WSJ
ECB Will Probably Have to Hike Rates Again, Wunsch Says - Bloomberg
Pope Leo Found to Have Lung Cancer During Surgery, Vatican Says - NYT
Condé Nast has an Anna Wintour problem when it comes to hiring a new CEO - NY Post
ONE MORE THING
Matthew McConaughey spent a weekend in the desert reading 20 years of bad reviews: “you can learn from it.”
Matthew McConaughey has an Oscar and an estimated net worth of $200 million. But he said recently that he once collated a hefty catalog of 20 years’ worth of his negative reviews—all the worst things ever written about him—and went to the desert for a weekend to read every one.
“I took them on as a thick book … the negative ones—and I sat with them,” McConaughey said. “It’s all I took, and I spent two days looking at them, and it was hard.”
“Some of the reviews, what I learned is that, from the very first sentence, this person has it out for me. It didn’t matter if they saw the movie or not. They just don’t like me,” McConaughey explained. But some were actually useful, he said. “They were looking at the work and objectively criticizing it.”
“Some are going to write bad about you or wish you the worst no matter what, because they just don’t like you from afar, don’t like your success or what have you,” he added. “Some are really good critics or write constructively about what you did wrong—and you can learn from it.”
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