For three years, the artificial-intelligence buildout has been sold in the language of inevitability. This week it was priced in the language of credit, which is far less forgiving.

By Friday’s close, the Nasdaq Composite had fallen 2.14 percent on the day and about 4.5 percent on the week, its worst week since June, CNN reported. The S&P 500 lost 1.09 percent to 7,659.44, wiping out the previous week’s gains, when it had set an all-time high. All but seven of the 75 stocks in the index’s technology sector closed lower on Friday, according to the Associated Press. The Philadelphia semiconductor index fell for an eighth straight session and lost 11.4 percent on the week, its worst since April 2025. In Seoul, the Kospi, which is heavily weighted toward SK Hynix and Samsung Electronics, fell 14.5 percent in five days. That was its worst week since 2008.

Stock selloffs happen all the time. This one is worth your Saturday because of where it started.

The tenant, not the landlord

The trouble started in a category most readers had not heard of two years ago: the “neocloud.” A neocloud borrows money, buys Nvidia chips and rents the computing power to AI developers. CoreWeave is the best known. It is backed by Nvidia and listed its shares in March 2025. CNN reported that its stock lost about a quarter of its value this week and almost 12 percent on Friday alone. That came a day after Nvidia chief executive Jensen Huang told Bloomberg he was optimistic about the company. The shares are down more than 65 percent from their peak shortly after the IPO.

The bonds tell a sharper story. According to PitchBook reporting published by Morningstar, CoreWeave’s most actively traded bonds, its 9.75 percent senior notes due 2031, traded as low as 78 cents on the dollar on Oct. 14. That works out to a yield of about 16.4 percent. They had started October at roughly 85. Its $1.25 billion issue of 9.625 percent notes due 2032 traded at 103.625 on June 2. It fell to 75, a yield of about 16.5 percent. On Oct. 15 the two issues recovered to 83 and 80. Yields in the mid-teens signal that investors see a materially higher risk of default or loss.

“As people get concerned about the trajectory of the buildout, they are the subprime tranche of the AI trade, and that’s why they’re selling off first,” Gil Luria, head of technology research at D.A. Davidson, told CNN. Luria also said he believes AI demand is real and growing. Both things can be true. Strong demand for a product does not mean its most heavily indebted seller can pay its debts.

The worry has spread to similar companies. JPMorgan analysts downgraded Applied Digital’s project-finance bonds to neutral. They cited a looming “supply overhang” because the developer is preparing to borrow more. Wall Street analysts estimate it may need about $8 billion in additional secured project debt. Cipher Digital, a former bitcoin miner that now builds data centers, announced a private offering of $850 million in zero-coupon convertible notes due 2032. Its stock fell to a six-month low as investors worried their shares would be diluted.

Money got expensive again

At the interest rates of 2021, none of this would matter as much. It matters now because the 10-year Treasury yield, at 5.09 percent on Friday, topped 5.30 percent earlier this month. AP reported that was its highest level since 2002. In September, the Federal Reserve raised its benchmark rate for the first time in three years. According to CME Group data cited by AP, traders now put the odds of another increase in December at about 74 percent. On Friday, Brent crude briefly reached $110 a barrel for the first time since May, and there is still no deal between Washington and Tehran to end the Iran war. Each of those numbers raises the cost of a business model that borrows today against rent it expects to collect later.

Who is actually making money

The contrast is uncomfortable. On Thursday, TSMC reported third-quarter net income of NT$763.06 billion on revenue of NT$1,494.24 billion, a net profit margin of 51.1 percent. The company that makes the chips keeps about half of every dollar it books. Companies that rent those chips out are paying double-digit yields to borrow. (See Victor Ledger’s analysis in Business.)

That is where the boom stands this weekend. At the bottom of the supply chain, the chipmaker earns extraordinary margins, like a toll booth. Above it are the biggest tech companies, which have cash to spare. Between them is a layer of borrowers that needs the price of money to fall. Instead, it has risen.

The bull case has not gone away. Chip stocks remain up more than 50 percent this year, even after falling more than 20 percent since their June peak, CNN reported. But the debate has changed. The question for the coming weeks is not whether AI is real. It is whether the companies that borrowed to build it can afford to wait for it to pay off. Watch the bonds before the stocks. The bond market tends to see trouble first.

Katie Zacharia is leaving the job of White House press secretary five days after taking it. The Guardian, citing a White House official, reported that she was fired on Friday. The Associated Press, citing a person familiar with the matter, reported that she would transition out of the role. Zacharia confirmed on Friday evening that she was leaving.

“President Trump is a kind, wonderful, gracious, thoughtful, enthusiastic, and hardworking man,” she wrote on social media. “It was an honor to work for him.”

The end was foreshadowed hours earlier by the president. Speaking to reporters on the White House lawn as he left for a rally in Georgia, Trump said he had raised the question with her directly. “I said, ‘Honestly, if I were you, I’d reconsider,’” he said. “‘You think about it, but I would reconsider.’” He added that he thought she had been treated unfairly by the press, and said many people wanted the job.

Trump announced Zacharia’s appointment on Oct. 9. She succeeded Karoline Leavitt, who had been in his inner circle for years. Zacharia’s first and only briefing came on Tuesday. It lasted about 14 minutes. She took questions from three reporters, all from conservative-leaning or Trump-friendly outlets, and left the podium. Zacharia later said she had kept it short to leave time for the president’s own session with reporters, and that she had not been fully briefed by staff beforehand.

Questions about her background followed almost immediately. Zacharia is a graduate of Pepperdine University’s law school. She had described herself as a lawyer as a conservative television commentator, and the White House announcement of her appointment called her an “attorney.” She later confirmed that she had taken the bar exam once and failed it. She argued there was a difference between a “lawyer” and an “attorney,” a title reserved for people licensed to practice. She has also said she worked as a lawyer in China.

The pressure did not let up even on friendly airwaves. On Thursday night, Fox News host Sean Hannity opened by asking her, bluntly, “What happened?” On Friday morning, Fox & Friends asked whether she still had the president’s confidence. She would not say when her next briefing would be.

Before joining the White House, Zacharia had worked in communications at Trump Media, the parent company of Truth Social. She had also worked briefly at the Department of Homeland Security during the second Trump administration. She said on Fox that no one had asked her about the bar exam before she was hired. Trump noted that he had hired her as a spokesperson, not as a lawyer.

The White House has not named a successor. The midterm elections are on Nov. 3.

A wind-driven brush fire tore through neighborhoods on the border of San Clemente and San Juan Capistrano on Friday. Fire officials said it damaged or destroyed six homes and forced about 16,000 people to leave their homes before nightfall.

The Orange County Fire Authority said crews responded shortly after 11:30 a.m. to reports of a fire near Portico Del Norte. Hot temperatures, low humidity, dry brush and Santa Ana winds blowing from the interior toward the coast drove its rapid growth. By Friday evening it had grown to about 570 acres. CNN reported that the fire authority listed it as zero percent contained. Officials said two firefighters suffered significant injuries and were in stable condition at hospitals.

“In anticipation of the fire weather that we’re currently experiencing, we had upstaffed a bunch of resources and placed them in strategic areas,” OCFA Battalion Chief Mark Backhoff told CBS Los Angeles. Capt. Steve Concialdi said crews had knocked down most of the fire by early evening. He warned that the danger was not over: “When we have Santa Ana winds, they could blow embers a mile, even greater.”

Officials gave different numbers of homes under evacuation orders in different briefings. Figures ranged from about 4,600 to 6,000 homes across zones in both cities. Evacuation shelters opened in both cities. The Capistrano Unified School District dismissed ten schools early. Rep. Mike Levin, a Democrat whose district includes part of the area, said his own family had evacuated their San Juan Capistrano home.

“I’ve lived here since 1995, and this is the first time we’ve really ever had a fire in this area,” resident Robert Morris told KCBS. “It’s a wake-up call.”

Gov. Gavin Newsom said the state had secured federal FEMA assistance for the fight. San Diego Gas & Electric reported two outages near the fire affecting nearly 3,000 customers combined. The South Coast Air Quality Management District warned that smoke would make air unhealthy for sensitive groups in parts of south Orange County until Saturday morning.

The Norte Fire is one of several fires burning across Southern California. In Malibu, the Bryson Fire, which started Thursday evening, had burned about 150 acres and was 17 percent contained. More than 7,000 structures were in areas under evacuation orders or warnings, according to Los Angeles County Fire. In San Diego County, the Henderson Fire had burned about 2,080 acres at Marine Corps Base Camp Pendleton and was 20 percent contained, according to Cal Fire.

A heat advisory remains in effect until 8 p.m. Saturday, with temperatures forecast to reach up to 95 degrees. Forecasters expect the winds to weaken later in the weekend. Until they do, officials are asking residents to follow evacuation orders and stay off the Interstate 5 corridor near the fire.

For years, export controls in the AI race have mostly been an American tool. On Friday, China published a list of its own.

China’s Ministry of Commerce and Ministry of Science and Technology jointly issued Announcement No. 48. It proposes adding 40 technologies to the country’s catalog of technologies whose export is banned or restricted: 23 in artificial intelligence, 12 in solar manufacturing and five in biomedicine. The public can comment until Nov. 15. One part does not wait for the consultation: starting immediately, anyone exporting a listed technology must register the deal with the commerce ministry first. According to a translation of the notice published by Geopolitechs, that includes exports that have already started but are not yet complete.

What would be banned, and what restricted

The draft bans the export of core technology for large AI models trained on China’s “important” national data. It also bans AI agents designed for highly sensitive settings such as national defense and critical information infrastructure. AI tools that can write or alter malicious code on their own to attack critical systems face a total ban.

The draft would restrict, rather than ban, the export of frontier models above certain thresholds. According to The Decoder’s reading of the annex, the restrictions would apply to a model’s weights, source code, architecture and training methods. They would kick in if a model was trained with at least 10^26 floating-point operations of computing power, has 2 trillion or more parameters, or ranks in the global top 10. AP noted that Moonshot’s Kimi K3 and Alibaba’s Qwen 3.8-Max already exceed 2 trillion parameters, though the proposal names no specific models. Some design technologies for AI and memory chips are also on the list.

The draft leaves some activity uncontrolled. Technology that has already been made public through open-source releases or papers is exempt. So is using a model through an API, an app or a hosted software service. According to The Decoder, installing restricted technology on servers abroad would need a license. Releasing it as open source would qualify for automatic licensing.

Why it matters

“The Chinese government is implementing such necessary measures with the aims of reinforcing the security bottom line, preventing misuse and abuse, and ensuring that AI remains under human control,” the commerce ministry said in a statement.

Lian Jye Su, chief analyst at Omdia, told AP the move could be seen as a response to Western countries placing sovereignty requirements on AI and other key technologies. Dean W. Ball, quoted by The Decoder, said the move does not mean China is shutting down open-weight models. He said it does show the government “establishing the optionality to shut down future open-weight models at will.”

That optionality is the real news. Many companies and governments outside China have built products on Chinese open-weight models. They now know that future versions could come with conditions. AP noted that the draft arrived as Washington and Beijing reported progress in talks on AI safety, including a channel for notifying each other of AI incidents that threaten national security.

The proposal also landed during a bad week for chip stocks. CNN reported that chip shares had not recovered since Chinese memory maker CXMT said earlier this week that it had made progress on advanced memory chips.

While CoreWeave’s bonds were trading like distressed debt, the company that makes most of the world’s advanced chips reported a quarter in which net income rose 68.7 percent.

TSMC reported its third-quarter results on Thursday. Revenue was NT$1,494.24 billion, and net income was NT$763.06 billion. Diluted earnings were NT$29.43 per ordinary share. An ADR unit is not the same thing as an ordinary share, and the company reports that figure separately, at US$4.60. We have kept the two apart. In U.S. dollars, revenue was $46.72 billion.

Compared with a year earlier, revenue rose 50.9 percent and net income rose 68.7 percent. Compared with the second quarter, revenue rose 17.6 percent. Gross margin was 66.4 percent and operating margin 58.7 percent. Net profit margin was 51.1 percent. Chips made on 7-nanometer and more advanced processes accounted for 79 percent of wafer revenue. The newest 2-nanometer process accounted for 8 percent. Chief financial officer Wendell Huang said the company expects fourth-quarter business to be supported by “the steep ramp-up of our 2-nanometer technology.”

Set against this week’s selloff, two points stand out.

First, demand is real. Nobody earns a 51 percent net margin selling a product customers do not want. Bears who argue that the AI boom has no customers have to explain TSMC’s quarter.

Second, a strong supplier quarter tells you very little about the companies further up the chain. TSMC is paid when wafers ship. A neocloud is paid over years of leases, and in the meantime it has to service debt at rates set by a bond market now asking for 15 percent or more. Those are different businesses with different risks. A strong quarter at the foundry does not reduce the risk for a lender to the foundry’s customers’ customers.

There are limits to what one release can show. It covers 90 days. It says nothing about whether today’s share price is a reasonable price for those earnings. It does not settle the risks of concentrating so much production in Taiwan, or the cost of the factories the company has committed to build. One profitable quarter is not proof that profits like this can last.

In plain terms, the AI economy as of this weekend looks like this. The company selling the picks and shovels keeps half of every dollar it books. The companies borrowing to rent those picks and shovels out are paying high-yield rates to stay in business. If you want to know where this goes next, watch the gap between those two numbers.

Cities usually honor movements with bronze. Bronze is expensive and slow, and it tends to tidy up its subjects. On Saturday, Oakland is doing something cheaper and, I think, more honest. Three blocks of Broadway, between 14th and 17th streets, are being dedicated as Black Panther Party Boulevard.

The Oakland City Council approved the honorary designation unanimously last month. SFist reports that it recognizes the downtown blocks where Panthers distributed their newspaper, registered voters and campaigned for public office. The official street name stays Broadway for mail, maps and 911 calls. A commemorative plaque will mark the change. It is a sign on a street that already exists. It costs almost nothing and asks nothing of anyone driving past. Still, it puts the name back where the work was done.

“To have the Black Panther Party’s name recognized on Broadway, on streets where Panthers organized and worked directly with the people, brings this history home,” said Fredrika Newton, president of the Dr. Huey P. Newton Foundation, in comments reported by SFist.

As a newspaper, we notice the detail that matters most. The Panthers did not only patrol and organize. As KQED’s Pendarvis Harshaw writes, they fed schoolchildren, started medical clinics, ran a school and published a newspaper that reached readers around the world. A lot of what later generations remember about the party first reached people as newsprint handed over on a corner. Broadway was one of those corners.

The anniversary weekend is also a reconciliation. KQED reports that the Newton foundation and the Bobby Seale Legacy Foundation organized the slate together. “It’s the first time that these legacies have worked together,” Dr. Xavier Buck, executive director of the Newton foundation, told KQED. He called it important because one of Seale’s greatest regrets was not making amends with Newton before Newton was killed in 1989. Seale is expected at Saturday night’s gala, where the cover art for a new edition of his book *Seize the Time* will be unveiled.

The conference program includes sessions on reparations, women in the party, community education, free health clinics and, inevitably, AI. Billy X Jennings, a historian and former Panther, curated *Honoring the Rank & File* at the Oakland Public Library. The exhibition documents rank-and-file members who ran community programs, and it runs through Jan. 9. On Sunday, a free community day at Lil’ Bobby Hutton Memorial Park in West Oakland returns to the ground where the Panthers held rallies six decades ago.

A street sign does not settle any of the arguments the Panthers started. KQED points out that demands from the party’s Ten-Point Program, including decent housing and an education that teaches people their true history, remain unmet. But a monument does not have to settle arguments. It has to tell people what happened on this spot. Here, people sold a newspaper they wrote themselves. Oakland got that right.

Sixteen years ago, “The Social Network” turned a lawsuit over a dorm-room website into a story about betrayal, with a Trent Reznor score and a famous line about a billion dollars. Last weekend its companion, “The Social Reckoning,” opened to $5.5 million in North America. That is about a quarter of the roughly $22 million the 2010 film made in its first weekend, according to TheWrap and Spyglass.

The reviews are not a disaster, but they are not good either. TheWrap reports a B-minus CinemaScore and Rotten Tomatoes scores of 55 percent from critics and 73 percent from audiences. The film is a co-production with Alcon and reportedly cost about $30 million, so Sony can absorb the loss. Absorbing it is not the same as explaining it.

The standard explanation is fatigue: people do not want to pay to relive the news. Paul Dergarabedian, an analyst quoted by TheWrap, called it a case of “the cinematic equivalent of fast food” beating “the cinematic equivalent of fine dining.” He also put it more precisely: “‘The Social Network’ was a story of betrayal. It had Justin Timberlake in it. There were spoonfuls of sugar that helped the medicine go down, while ‘Social Reckoning’ is more of a document for our time.”

“Document” is the right word, and it points to the real problem. This time Sorkin directed as well as wrote. Jeremy Strong plays Mark Zuckerberg, who is now a supporting character in his own story. At the center is Frances Haugen, the whistleblower played by Mikey Madison, and the 2021 fight over what Facebook knew about the harm it was doing. Sorkin asked the press to call the film a “companion” rather than a sequel. That request tells you he knew this was a different kind of film. It is a deposition with a score.

The timing made things worse. According to TheWrap, Meta agreed last month to a $17 billion settlement in a multistate lawsuit over social-media addiction. A major settlement has arrived, while related litigation continues. A movie that walks the audience through the evidence feels like homework assigned after the exam.

In his newsletter, M.G. Siegler argues that the film should have gone straight to streaming. He also suggests the real successor to “The Social Network” may be “Artificial,” the OpenAI film, which he says has drawn strong early reviews. That fits the pattern. Good tech stories are about people whose ambitions are still unresolved. The 2010 film worked because no one yet knew what Facebook would turn into. The AI story still has that uncertainty. This week’s bond market made clear that nobody, including the people financing it, knows how it ends.

The lesson for this fall’s other tech films, including Siegler’s mention of a four-hour “Musk,” is not to avoid the present. Drama comes from not knowing the outcome. “The Social Reckoning” is about a story whose ending everyone already knows.

On Friday in Bangkok, the managing director of the International Monetary Fund offered a metaphor that was always going to be quoted. Artificial intelligence, Kristalina Georgieva said, is a Formula 1 race car that might leave the track and run people over. “We are racing, and the question is how do we put barriers?” she said, according to the Associated Press. “So if a car was to fly out it doesn’t kill people.”

On the same panel, Jack Clark, Anthropic’s co-founder and head of policy, went further. “I think it’s worse than you describe. I think it’s Formula 1 at night without maybe brakes in the cars,” he said. “And it’s remarkable to me that the toys I buy for my children are regulated more than the literal superintelligence I work on at my day job.”

Those lines are vivid and easy to repeat, and they are about the wrong risk. A crash is dramatic, and it is the kind of danger institutions already know how to talk about. The more revealing sentence came later in the session, when Georgieva described what an IMF study found about jobs.

She said about 10 percent of jobs might be transformed or newly created, and that repetitive work would disappear. A third category would be service jobs created by people who benefit from the investment boom. “The net impact is positive,” she said. Then she added: “services don’t pay a lot. So you get young people who normally would have gone into professional routine jobs now serving coffee in Starbucks. And that is not what I think young people in the world aspire for.”

Call it the barista clause. The world’s most important economic institution has said in public that the AI transition may look positive in the aggregate statistics while moving a generation of graduates from the entry-level office jobs that start careers into counter work that does not lead anywhere. That is not a car crash. It is a slow loss of status that will never be a single news event, and that is why it is dangerous. Nobody holds a press conference about a career that never started.

Tiff Macklem, governor of the Bank of Canada, said the same panel’s quiet part out loud. He compared AI to trade, which raised global wealth while costing millions of manufacturing workers their livelihoods. “You have to find a way to help the losers,” he said. “Without a system to help them cope with the loss you get a backlash.”

We already ran that experiment. The help for trade’s losers was small, late and full of paperwork, and the backlash has shaped politics ever since. If the plan for AI is to say “net positive” again and promise retraining later, nobody should be surprised by the anger that follows.

Where I part ways with the panel is the metaphor. A race car on a track has spectators safely behind a barrier. AI has no grandstand. Most people are on the track, and the question is not only whether the car crashes. It is who owns the track and who collects the admission. This week we learned the chipmaker at the bottom of the supply chain keeps more than half of every dollar it books, while the companies that borrowed to build data centers are paying junk-bond yields. Profits are concentrating at a few points in the system. A serious transition policy would ask those points to pay for the barriers, and not only for safety rails against a crash. It would also fund the first rung of the career ladder that this technology is removing.

Clark said the decisions “cannot only be companies making these decisions.” He is right. It cannot only be central bankers on panels either. The test of whether the AI economy is working is not global growth. It is whether a 24-year-old with a degree can find work that leads somewhere. By the IMF’s account, that risk is now explicit, but its scale remains unknown.

The easy version of this story is about a résumé. A commentator called herself a lawyer, had failed the bar exam once and was found out. In that version, the system worked, because the press checked her claims and the president cut her loose. Everyone can feel good about it.

That version is too comfortable, and this paper does not intend to repeat it.

Here is what actually happened. The White House’s chief spokesperson walked into the briefing room on Tuesday, read a list of the president’s accomplishments, took questions from three reporters at conservative-leaning or Trump-friendly outlets, and left after about 14 minutes. That is the scandal. The bar exam came later, and it was a distraction. It also gave everyone involved, including the president, a less awkward reason for the ending.

The press secretary has never been there for the White House’s benefit. For most of the modern presidency, the daily briefing has been the one regular place where the most powerful office in the country has to answer questions it did not choose. Most of the answers are evasions, and they are still useful, because an evasion is on the record. The job requires someone willing to stand in front of hostile questions and stay there.

Zacharia was not hired for that job. She was hired, by her own account, without anyone asking whether she had passed the bar. She has said she was not fully briefed before her debut. Her strongest defense came on Fox News, and even Sean Hannity began by asking, “What happened?” The president’s judgment, delivered on the lawn, was that she did not need the job and should reconsider it. Nobody in that chain treated answering questions as the work. Everyone treated it as something to get through.

That is why her departure fixes nothing. The next press secretary will be judged by the same standard Zacharia failed: can you get through a friendly television interview? A better standard would be whether you can take forty minutes of questions from Reuters, the AP and a local reporter from a district that is about to vote. The midterms are on Nov. 3. Voters who want to know what the administration will do about a 10-year Treasury yield above 5 percent, a war that keeps oil near $110, or wildfires in Orange County deserve someone at the podium who stays for the follow-up.

We covered Zacharia’s debut, and we do not enjoy writing about her exit. She was put in a job she had no reason to think she could do. Then the people who put her there blamed the job for the result. The White House should hire someone who will stay at the podium until the questions run out.