Day: November 3, 2025

In today’s newsletter: The attack left nine in life-threatening condition but the police have ruled out any suggestion that it was a terrorist incident

• Big Tech’s AI race has become a “prisoner’s dilemma” that few can escape, a top hedge-fund executive said.
• History shows real breakthroughs take years to pay off, but Wall Street’s in a hurry for AI gains.
• Rising AI euphoria is fueling fears that the boom could burst fast.

The race to dominate artificial intelligence has turned into an expensive competition that traps Big Tech companies into “a little bit of a prisoner’s dilemma,” a top hedge-fund executive said.

“You have to invest in it because your peers are investing in it, and so if you’re left behind, you’re not going to have the stronger competitive position to it,” said Tony Yoseloff, the chief investment officer at hedge fund Davidson Kempner Capital Management, which manages about $37 billion. He spoke on the Goldman Sachs “Exchanges” podcast published on Friday.

He said that spending dynamic doesn’t just affect Silicon Valley. Because a small number of mega-cap tech stocks dominate the US equity market, their behavior now influences nearly every investor.

‘AI wobble’ risk

Yoseloff isn’t dismissing AI as hype. Instead, he frames it within the long pattern of technological change.

He pointed out that it took about 10 years from when personal computers became popularized in the United States in the 1980s to see productivity gains in the workplace. And it took about five or six years from the mass marketing of the internet to see similar gains.

If history repeats, the economic benefits of today’s AI boom could still be years away. But he said the markets are acting as if the payoff is imminent.

“So the way I like to think about it is: Is there going to be an AI wobble at some point? Are investors going to be concerned about how those CapEx dollars are being invested?” he said.

Yoseloff noted that the enormous AI spending is being driven by some of the healthiest companies in the world, which can afford to reinvest their cash flow. But public markets may not be as patient.

“What happens when the market starts to challenge the assumptions of just what the returns are going to be on this?” he asked. “How patient is the market going to be on those returns?”

Yoseloff compared the current moment to earlier “dot-com” and “nifty fifty” eras of extreme market concentration and enthusiasm for breakthrough technologies and growth stocks.

While those trends were based on real innovations, it took investors some 15 years to get their money back.

Yoseloff’s comments came amid a broader debate about whether massive investments in AI are sending the stock markets into a bubble.

Some leaders, including OpenAI CEO Sam Altman, have cautioned about overexcitement in AI — even as they acknowledge the technology’s game-changing potential.

“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes,” Altman told reporters in August, adding that it’s also the “most important thing” to happen in a long time.

In late October, Microsoft cofounder Bill Gates likened the current environment to the late-90s internet bubble and cautioned that “there are a ton of these investments that will be dead ends.”

• Belgium’s defense minister said three drones were spotted over a sensitive military base on Sunday.
• Theo Francken said the drones were clearly spying, but a deployed jammer failed to neutralize them.
• Several vehicles, including a helicopter, were deployed to chase one drone but lost track of it.

Belgium, the host of NATO’s headquarters, said it’s been struggling to deal with drones spying on a critical military base housing its advanced fighter aircraft.

Theo Francken, Belgium’s defense minister, wrote on X on Sunday that the country had detected at least three large drones flying high over the Kleine-Brogel air base within a single night.

“This was not a simple flyover, but a clear mission with Kleine-Brogel as the target,” he wrote.

The incident underscores concern in the West that Europe is unprepared for the evolving fight against hostile uncrewed aerial systems.

On Sunday, Francken wrote that a deployed drone jammer couldn’t neutralize the aircraft. He speculated that the failure may have been due to issues with distance or the jammer not targeting the correct radio frequency.

He added that a police helicopter and several vehicles were mobilized to pursue one of the drones, but they eventually lost track of it after chasing the system for several kilometers.

Francken wrote that more counter-uncrewed aerial systems “are urgently needed.”

While he didn’t say on Sunday who was operating the drones, European leaders have continually suggested that Russia is the culprit for a series of recent similar incursions in NATO territories.

Earlier this week, the defense minister said he was proposing a $58 million plan to immediately purchase systems that can detect and destroy enemy drones, warning that Belgium was in an “interim phase” between peace and war. Francken has also urged Belgium to consider long-term investments of some $580 million for anti-drone defenses.

For context, Brussels plans to spend roughly $38 billion between 2026 and 2034 to shore up what it said are gaps in its country’s forces. In February, it raised its 2025 defense budget to $13.8 billion, or about 2% of Belgium’s GDP.

Kleine-Brogel, in northeastern Belgium, hosts the country’s fleet of F-16 Fighting Falcons and is set to be where Brussels will keep its new F-35 Lightning IIs.

The US is also largely believed to be storing several dozen nuclear weapons at Kleine-Brogel as part of its nuclear deterrence strategy in Europe.

The Belgian defense ministry did not respond to a request for comment sent outside regular business hours by Business Insider.

Francken’s statement on Sunday comes as Belgium has reported drone incursions over several bases, including repeated sightings this weekend at Marche-en-Famenne, which hosts a logistics camp for the Belgian army.

On October 3, Belgium reported at least 15 drone sightings over its Elsenborn training camp near the German border.

European NATO has been on high alert for airspace violations since early September, when multiple Russian drones entered Poland in one night and prompted Warsaw to activate its forces to intercept.

Multiple alliance members, such as Denmark and Norway, have since reported drone incursions over military installations and civilian airports.

The string of incidents has left Europe scrambling for cost-effective ways to fight enemy drones, which are often far cheaper than the interceptors that NATO traditionally relied on for aerial threats.

Some NATO allies, including Denmark and Poland, have sought to bolster their air defenses with help from Ukraine, which now often fights hundreds of Russian drones in a single night.

• Larry Summers said it was “good news” that the Trump-Xi meeting ended without conflict or confrontation.
• The former Treasury secretary said the event could have had “unfortunate and destabilizing outcomes.”
• Trump lowered tariffs on Chinese exports and reached agreements on agriculture and rare earths.

Larry Summers said the best part of President Donald Trump’s first meeting in six years with China’s leader, Xi Jinping, was that it didn’t end in chaos.

In a Friday interview with Bloomberg, the former US Treasury secretary spoke about Thursday’s meeting between the two leaders in South Korea. The gathering resulted in a tariff truce, agreements on agriculture and rare earth minerals, and cooperation on fentanyl.

“I think the most important thing is what didn’t happen,” Summers said to Bloomberg. “This situation didn’t spiral out of control into massive confrontation and economic conflict.”

“It was managed in a way that avoided what potentially could have been very unfortunate and destabilizing outcomes, and that’s the good news, I think it genuinely is good news,” he added.

Summers told Bloomberg that several issues were not broached during the meeting, including technology and rising competition in artificial intelligence.

“But this is a book that’s got many chapters, and we are still in the early chapters,” he said about US-China relations.

The Trump-Xi meeting in Busan was the final stop on Trump’s Asia trip. It helped thaw tensions between the two superpowers, and markets were largely stable afterward.

Trump halved 20% tariffs on Chinese goods linked to fentanyl production after Xi agreed to a firmer curb on the flow of the drug into the US.

Trump also announced that China had agreed to buy US soybeans, sorghum, and other agricultural goods, and to export rare earth minerals to the US.

In a fact sheet released on Saturday, the White House said that it would keep “reciprocal” tariffs on China paused for another year, until November 2026.

Speaking about his meeting with Xi and US-China relations during CBS’s “60 Minutes” episode released on Sunday, Trump said, “I think we get along very well.

“And I think we can be bigger, better, and stronger by working with them, as opposed to just knocking them out,” he said.

Representatives for Trump did not respond to a request for comment from Business Insider.