▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.
[Key Issue Briefing]
■ AI Valuation Debate: Anthropic's third-quarter revenue rose to $16.8 billion, but its growth rate fell from 142% to 45%, triggering a debate over slowing growth. As a result, ahead of an initial public offering that could come as early as next month, some investors have reportedly begun discussing a valuation of about $1.5 trillion, a 25% cut from the earlier $2 trillion figure.
■ Fed Optimism: Kevin Warsh, chairman of the U.S. Federal Reserve, called AI the most significant change he has witnessed in his lifetime and expressed confidence in long-term productivity gains. Financial markets, meanwhile, took his remarks as a signal that the Fed is in no hurry to tighten further, and the probability of an October rate increase priced into interest-rate futures fell from about 30% to the 10% range during the conversation.
■ EU Trade Shield: European Union leaders discussed so-called kill switch powers that would allow the bloc to completely block Chinese products from accessing its market, and asked the European Commission to draw up measures by the end of the year. The move is seen as a response to the EU's record trade deficit with China of $34.8 billion in September and to mounting concern over weakening competitiveness in core manufacturing sectors such as chemicals and machinery.
[News of Interest to Global Investors]
1. Revenue Growth Stalls as Meta and Microsoft Pull Back — Anthropic's Valuation Falls $500 Billion
- Key points: Anthropic, the developer of the AI model Claude, has become embroiled in a debate over slowing growth. According to the Financial Times and other outlets, Anthropic told investors that third-quarter revenue reached $16.8 billion, continuing an upward trend after $4.8 billion in the first quarter and $11.6 billion in the second. But the quarter-on-quarter increase narrowed to $5.2 billion from $6.8 billion, and the growth rate fell 98 percentage points to 45% from 142%. Meta and Microsoft switched to their own models or cheaper open-source alternatives to cut Claude's high costs, while a crackdown on distillation — a method of collecting another model's answers and using them for training — by DeepSeek and Alibaba shrank related revenue that had accounted for 5% to 7% of the total, exposing a gap in growth. The method of calculating annualized revenue by multiplying a particular month's revenue by 12 has also come under scrutiny again, with market research firm SemiAnalysis lowering its annualized revenue estimate to about $74 billion. Investors see the near-term outlook for the AI market as hinging largely on whether Anthropic's IPO succeeds and on OpenAI's listing next year.
2. Fed Chairman Warsh Says AI's Road Is Rough but Will Ultimately Create Wealth; Markets Relieved
- Key points: Federal Reserve Chairman Kevin Warsh again stressed his optimism about AI's long-term economic effects. According to Bloomberg and other outlets, Warsh spoke on the 16th at the annual meetings of the International Monetary Fund and the World Bank in Bangkok, Thailand, in a conversation with IMF Managing Director Kristalina Georgieva. He called AI the most significant change to occur in the U.S. and global economies in his lifetime and said AI is affecting the demand side before the supply side. He avoided specifics on the question markets were most focused on — whether rates will rise further — and the probability of an October rate increase, based on CME's FedWatch tool, fell from about 30% to the 10% range during the conversation. Separately, on the sidelines of the meetings, Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung-il and Bank of Korea Governor Shin Hyun-song held the first-ever Korea-U.S. "2+2" meeting with Warsh and U.S. Deputy Treasury Secretary Francis Brooke to discuss economic and financial cooperation.
- Key points: Wall Street is on guard for further market intervention by U.S. Treasury Secretary Scott Bessent. According to Bloomberg, major Treasury dealers were set to receive survey questions on refunding from the Treasury Department on the 16th, and the department will announce its quarterly debt issuance plan on the 4th of next month. The Treasury earlier made a surprise announcement that it would double its bond buyback program to $4 billion (about 5.327 trillion won) as long-term yields continued to climb, prompting market commentary describing it as a "Treasury twist," a reference to the Fed's Operation Twist, a policy of selling short-dated debt and buying longer-dated bonds. Citigroup said the survey could signal the possibility of reduced long-dated issuance, including cutting or eliminating the 20-year bond, but with short-dated debt now exceeding 22% of total Treasury debt, refinancing pressure remains a burden. Vishal Khanduja, a fund manager at Morgan Stanley Investment Management, said the Treasury needs to behave far more predictably, and that upsetting buyers and making policy hard to predict is the worst thing it could do.
- Key points: After moving to cut hybrid vehicle imports, the EU is now preparing new trade rules that could block Chinese products entirely. According to Bloomberg, EU leaders discussed new regulatory powers to counter unfair trade practices by China and other competitors at a summit in Brussels, Belgium, on the 15th, and Lithuanian President Gitanas Nauseda said the measures could include completely closing the market. European Commission President Ursula von der Leyen presented as an option a kill switch that would allow Chinese companies to be removed from the bloc's market quickly, and the commission has begun reviewing safeguard measures that would extend to chemicals, machinery and other sectors the cap on Chinese hybrid vehicle imports, which is set at 350,000 units a year from 2027. At the same time, the EU's trade deficit with China hit a record $34.8 billion in September according to China's General Administration of Customs, and China's total exports surged 36% from a year earlier, as German chemical maker BASF and others pursue restructuring and specialty chemicals firm Lanxess plans to cut about 550 more jobs.
