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Ukraine’s Drones Reach Russia’s Arctic “Gas Capital”; Is Nornickel’s Palladium Next?

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Ukraine’s Drones Reach Russia’s Arctic “Gas Capital”; Is Nornickel’s Palladium Next?
Ukraine’s Drones Reach Russia’s Arctic “Gas Capital”; Is Nornickel’s Palladium Next?

For most of the war, Russia’s Arctic was the part of the map nobody bothered to defend. That changed a month ago.

On September 9, Ukraine’s Special Operations Forces said their drones flew “more than 3,000 kilometers” to hit two gas condensate plants in the Yamalo-Nenets region: Gazprom’s Novy Urengoy condensate treatment plant, with a design capacity of 19.5 million tons of feedstock a year, and Novatek’s Purovsky plant near Tarko-Sale, which processed 13.4 million tons of condensate in 2025 (Hromadske, Al Jazeera). “Until today, this was considered an absolutely safe rear area for the aggressor,” the SOF said. Bloomberg and Reuters both picked up the claim; the Kremlin’s envoy to the Urals, Artem Zhoga, confirmed it was the first attack to reach the Arctic.

On Tuesday Moscow gave its answer: cash. The Yamalo-Nenets government approved a payment of 1 million rubles (about $11,700) for every drone destroyed over the region, the highest bounty any Russian region has offered, according to TASS (others pay 20,000-200,000 rubles). The money goes to local “mobile fire groups,” and there is a catch: per the decree, it is paid only if the defended facility suffers no damage, and the kill has to be confirmed by the military commissariat. Joining a fire group pays 100,000 rubles if you have a job and 150,000 if you don’t, and requires signing a Defense Ministry contract (Barents Observer).

Paying the unemployed more than the employed to stand on the tundra with a machine gun: nothing says confident air defense quite like it.

Russian mobile fire team trying to intercept a Ukrainian drone in Belgorod region, Russia, 2025. (Photo: open source) 

Regular readers know we have been tracking Ukraine’s drone range creep since it first reached Western Siberia last October. Since then the line has moved from Tyumen to Omsk (hit again on Thursday) to the Arctic Circle. So the obvious next question, and the one now going viral on X, is whether Norilsk, home of the world’s biggest palladium miner, is next. As we show below, that is the wrong question: the Nornickel asset that matters for palladium is not in Siberia at all, and it is much closer to Ukraine than Novy Urengoy.

What Actually Got Hit

As usual, Russian officials described the strike as a successful interception. Yamal governor Dmitry Artyukhov said “falling debris” caused a fire at “one of the city’s industrial facilities,” with no casualties (NV). Somehow the debris keeps landing on the most expensive equipment.

Ukrainian OSINT group CyberBoroshno says the drones hit the de-ethanization unit at Novy Urengoy. That matters more than it sounds: the unit’s gas feeds the Novy Urengoy gas chemical complex, which can make up to 400,000 tons of low-density polyethylene a year, so without it the chain from condensate to plastic stops (per RBC-Ukraine, Militarnyi). Satellite imagery also reportedly shows damage at Purovsky. Both of those claims come from Ukrainian OSINT and Russia has published no production data, so treat them accordingly.

Purovsky is the more interesting target for markets. According to Novatek’s own description, most of its stable condensate goes by rail to Ust-Luga on the Baltic for processing and export, the same port complex Ukraine has hit repeatedly, most recently when drone strikes crippled Russia’s key Baltic ports in March. Ukraine has now hit Novatek’s condensate chain at both ends, 2,800 km apart.

The region is not a side show either. Yamalo-Nenets produces roughly 80% of Russia’s natural gas and holds about two-thirds of its gas reserves (Al Jazeera); Yamal LNG and Arctic LNG 2 sit at its northern edge. The Fire Point FP-1 that its maker says carried out the attack costs under $60,000 to build. Even in Arctic economics, a million-ruble bounty per drone and a $60K drone is a trade that only works for one side.

All of this lands while Moscow’s oil and gas budget is already shrinking: the Finance Ministry cut its 2026 oil and gas revenue estimate to RUB 7.6 trillion from RUB 8.9 trillion.

The Norilsk Siren That Wasn’t (Quite)

Which brings us to this morning’s viral claim, courtesy of Visegrád 24: “The city of Norilsk has started testing its air raid alarm system” because Ukraine “could be about to extend the range” of its drones, which “have a range of 3500 km. Norilsk is 4500 km away.“

There are a few problems with that. First, Russia’s emergencies ministry ran a scheduled, nationwide test of its warning sirens on October 9, with sirens and loudspeakers switched on “across the whole country“. Second, by our math Norilsk is about 3,340 km in a straight line from Ukraine’s northern border, not 4,500 km, and the drones that hit Novy Urengoy (2,800 km by the same measure) reportedly logged about 3,300 km of actual flight. So Norilsk is a stretch for now, but not science fiction.

Third, and more important: Norilsk is barely connected to anything Ukraine has hit. The Norilsk industrial district runs on its own gas from four Nornickel-owned fields on the Taimyr peninsula; its gas network is “not connected to the Unified Gas Supply System of Russia,” and it is powered by three gas-fired CHP plants and two hydro plants. Last month Nornickel finished five new wells at its Pelyatkinskoye field for 10 billion rubles. In other words, burning Yamal’s condensate plants does nothing to Norilsk’s furnaces.

So if you are worried about Russian palladium, stop looking at Norilsk and look 1,600 km closer.

The Real Chokepoint: Monchegorsk

In July, with almost no fanfare outside the Barents press, Nornickel moved the last stage of its precious metals chain out of Norilsk. It shifted processing of copper anode slime calcine from the Norilsk Copper Plant to Kola MMC in Monchegorsk, on the Kola Peninsula. The result, per the plant’s chief technologist: all of Nornickel’s palladium concentrate is now produced in one place, a plant she says accounts for around 40% of global palladium production. Nornickel spent about 500 million rubles to do it, citing higher recovery and lower costs (AK&M, Yle).

Monchegorsk is also Nornickel’s main nickel refinery, reportedly able to produce more than 165,000 tons of nickel a year, against company guidance of 193,000-203,000 tons for all of 2026.

Now look at the map. Monchegorsk is about 1,750 km from Ukraine’s northern border, closer than Omsk and 1,000 km closer than Novy Urengoy. The Olenya bomber base, a 30-minute drive up the road, was hit during Ukraine’s truck-launched “Spiderweb” operation in June 2025. Nornickel itself saw this coming: back in 2024 it tendered for six steel-and-cable “shields” over fuel tanks and key installations in Monchegorsk, “capable of dealing with possible kinetic attacks from any objects.” 

Put differently, Nornickel concentrated 40% of the world’s palladium refining into one plant that sits well inside the range Ukraine has already demonstrated, and did it in the same summer that Ukraine’s drones were setting distance records every few weeks. Efficiency at its finest.

To be clear, there is no sign Kyiv intends to hit Monchegorsk. Ukraine has stuck to energy and military targets, Nornickel is not under major Western sanctions, and Western automakers still buy its metal (which is precisely what makes it so valuable). But Kyiv’s targeting is explicitly about revenue that funds the war, and Nornickel is one of Russia’s biggest exporters: its H1 net profit doubled to $2 billion on revenue of $8.3 billion. The risk is not zero, and the market prices it as if it were.

A Palladium “Surplus” That Is One Bad Month Away From Vanishing

Nornickel was shrinking well before anyone pointed a drone at it. Output guidance for 2026 is 2.415-2.465 million ounces of palladium, down from 2.725 Moz in 2025 and, per Reuters, potentially the lowest in 20 years. First-half output fell 14% y/y to 1.199 Moz. The company blames depleting ore and the forced switch away from Western mining equipment, and says recovery comes in 2028.

Against that, Nornickel’s own market review sees the global palladium market in a surplus of just 0.3 Moz in 2026 (supply 9.4 Moz vs. demand ex-investment of 9.1 Moz), and expects investment demand of about 0.3 Moz to “effectively” bring it back into balance. Nornickel puts global primary production at 6.1 Moz, so it is roughly 40% of the mined supply.

Now the napkin math (approximate, and generous to the bears): at guidance, Nornickel produces about 200,000 ounces a month. One month of lost output at Monchegorsk erases two-thirds of the projected surplus; six weeks erases all of it. That doesn’t take a destroyed plant. A fire in the wrong workshop, a damaged substation or even a precautionary shutdown during drone alerts would do it.

Liquidity makes it worse. In their latest Commodity Analyst note (available to pro subs), Goldman’s commodities team (Lina Thomas, Daan Struyven) argues that tariff risk has pulled precious metal into the US, where it is likely to stay, leaving ex-US inventories tight:

“The tightening in available ex-US inventories came as investor interest broadened beyond gold into silver, platinum, palladium, and even copper. In a less liquid market, the same investor inflow can have a disproportionate impact on prices. While investor demand has softened as the market now prices a Fed hiking cycle, we expect much of the metal pulled into the US to remain trapped there, leaving available ex-US inventories tight and creating scope for a repeat of the 2025H2/2026H1 volatility should investor demand recover.”

Swap “investor inflow” for “supply outage” and the logic is the same: a thin market amplifies any shock to it. And palladium is about as thin as metals get.

That is also why the market’s complacency is notable. Spot palladium is around $1,154/oz, roughly 30% below where it started the year, under the weight of the Fed hiking cycle, EV substitution and the end of US trade-case drama.

Washington set anti-dumping and countervailing duties of 132.83% and 109.1% on Russian palladium, only for the ITC to rule in May that Russian imports do not harm US industry, so no duties (for now). US imports of Russian palladium were 27.6 tons in 2024, up every year since the invasion. Meanwhile Brussels’ 20th sanctions package banned transactions involving Murmansk port, one of Nornickel’s main export hubs, and the same Kola peninsula.

Regular readers will recall that we called palladium “the heavily-shorted high beta meme commodity of the PGM space” right before it ripped last summer:

And Nickel?

Less so. Nornickel’s 2026 nickel guidance of 193,000-203,000 tons is a sliver of a global market of well over 3 million tons dominated by Indonesian NPI, and Nornickel itself expects a nickel surplus of 20,000 tons this year and 55,000 tons in 2027. Russian metal produced after April 2024 also can’t be delivered against LME contracts, so a Kola outage would show up in premiums for high-grade Class 1 nickel and in Shanghai long before it hits the LME screen. Palladium is the one to watch.

Bottom Line

The Arctic strikes are mostly a story about Russian gas, condensate and budget revenue, and Moscow’s million-ruble bounty is a tacit admission that its northern energy base can no longer be defended by distance. For metals, the takeaway is not that Norilsk is about to be hit. It is that Nornickel has put all of its palladium in one basket, and that basket is already in range. All it takes, is one enterprising Ukrainian drone operator to completely destroy the global palladium supply chain.

The timing is awkward too. Trump is openly calling for Ukraine to “get a new leader” after Zelensky ignored six pleas to stop hitting Russian diesel facilities, and Kyiv answered his Putin diesel deal by hitting a Rostov fuel export terminal just hours later. A Ukraine fighting with Washington over energy targets has every reason to look for targets that hurt Moscow without raising US pump prices. A metals refinery whose output trades in a few hundred thousand ounces (and accounts for nearly half of global production) fits that profile.

We don’t think Kyiv goes there soon (or maybe it does, who knows). But with palladium down about 30% this year, consensus fixated on EVs and a “surplus” smaller than two months of Monchegorsk output, the market is pricing the tail at zero. It isn’t.

Much more in the full Goldman “Copper, Silver, PGMs: Tariff Uncertainty Likely to Persist” note, available to pro subs.

Tyler Durden
Sat, 10/10/2026 – 20:50

Trump Says “Time For Ukraine To Get A New Leader” After Zelensky Ignored Six Pleas To Stop Refinery Strikes

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Trump Says “Time For Ukraine To Get A New Leader” After Zelensky Ignored Six Pleas To Stop Refinery Strikes
Trump Says “Time For Ukraine To Get A New Leader” After Zelensky Ignored Six Pleas To Stop Refinery Strikes

Update (1200ET): As he was boarding Air Force One on the way to Tennessee this morning, President Trump made his feelings clear over how he feels about Ukrainian President Zelensky.

President Trump stated that “it’s time for Ukraine to get a new president”, criticizing Zelensky for bombing Russian oil refineries and accusing him of failing to end the war.

“I suggest they get a new leader who can make a deal.” 

One day after announcing plans to buy more than a million tonnes of diesel from Russia, Trump said the Ukrainian strikes were driving up global fuel prices and creating “problems for the world”.

“He wants to make problems for our farmers, our ranchers with diesel fuel because Russia supplies a large portion of the diesel fuel throughout the world. And we told them ‘Do whatever you want, but don’t hit the diesel fuel, because this is a big problem, a big shortage’.”

“And what does he do? He goes and hits the diesel fuel.”

Asked about the strikes, he said of Zelensky:

“He’d better damn well stop.”

WATCH:

*  *  *

Friday’s diesel deal between Trump and Putin wasn’t only about diesel. It was also about Kyiv.

Hours after Zelensky accused Washington of using Ukraine’s negotiators as a “smokescreen” for a backroom deal with Moscow, Axios reported that Trump decided to let Russia sell diesel after Zelensky ignored half a dozen US requests to stop attacking Russian oil refineries. The alleged source was a US official with direct knowledge, who did not hold back:

“Zelensky is misreading the room. By continuing to hit refineries, he is eroding the good will that he has built with Trump over the last six months.”

In other words, the sanctions waiver was as much a message to Kyiv as a gift to Moscow. So how did we get to this latest geopolitical twist, what is Trump actually got for lifting sanctions (spoiler: less than nine days of fuel), and why is the deal is on a collision course with the one Ukrainian policy Kyiv says it won’t give up. Let’s dig in. 

“Half A Dozen” Requests

The backstory is familiar to regular readers. One month ago, Trump – freaking out about soaring diesel prices – told reporters that Zelensky “has to stop knocking out diesel fuel in Russia,” and a day later he announced a truce that never really happened:

A few hours later, Kyiv kept hitting refineries anyway. Just last weekend Zelensky vowed to hammer more of them, and on Thursday Ukrainian drones set Russia’s largest refinery at Omsk ablaze, more than 1,500 miles from the border. Axios notes the strikes were “highly effective and caused an energy crisis in Russia,” prompting Moscow’s diesel export ban, which then “added more pressure to global diesel markets under strain from the war in Iran.”

The core disagreement is about symmetry. Zelensky told Trump, Witkoff and Kushner that he would stop hitting Russian refineries if Russia stopped hitting Ukrainian power plants. Trump wanted Ukraine to stop unilaterally, according to the official, and “didn’t see the attacks on refineries as equivalent to Russian strikes on Ukraine’s power grid.” Or, as the official put it: “The attacks on the refineries cause pain in Russia, but it causes pain for the U.S., too.“

Then there is what happened in Miami. During eight hours of talks on Friday, Witkoff and Kushner told the Ukrainian delegation that Trump was expected to call Putin and lift sanctions on Russian diesel, because Kyiv had ignored repeated requests on strikes “which were directly affecting U.S. consumers.” A Ukrainian official claimed the envoys also threatened that Trump could cut Ukraine off from US intelligence if it kept ignoring him. The US official denied that, saying the envoys merely reminded Kyiv that the US provides munitions and intelligence, so Ukraine “shouldn’t take actions that hurt American consumers.” That is a fine distinction, and Kyiv is unlikely to see the difference.

So was Ukraine’s team a “smokescreen,” as Zelensky charged? Not quite: the US delegation told them what was coming. But the decision was clearly made before they sat down. Zelensky’s reaction, in a statement reported by Politico:

“At this very moment, while our team is talking with the American team in Florida, at this very moment, the President of the United States is talking with the leader of the Kremlin… and has an agreement under which America is allowing Russia to export diesel fuel. That means more money for this war… I believe our team is simply being used as a smokescreen, and that is certainly not fair.“

He went further in an interview with Axios, calling it “not fair and not honest” and “a happy birthday present for Putin” (who turned 74 on Wednesday), and told reporters it was “a weak decision by strong partners.”

And the payoff from Putin? So far, none on peace. During the 90-minute call he declined to commit to resuming talks with Ukraine. Kremlin adviser Yuri Ushakov said Ukrainian strikes on Moscow and other cities during Russia’s parliamentary elections had “thwarted the possibility of an immediate resumption of the negotiation process,” adding: “The president said, we will think about when these negotiations can be resumed.” That is the kind of non-answer that tends to precede more non-answers. The US official still thinks Putin “is open to a discussion on ending the war,” and says Washington wants a “new proposal that will be good enough for him.” Witkoff and Kushner may visit Moscow and Kyiv next week, though Axios notes it’s unclear how Friday’s blowup will affect those plans.

What Trump Got: 4.8 Million Tons, Mostly “Thereafter”

Here’s what Trump posted on Truth Social shortly before Friday’s close:

“I have just concluded a highly successful discussion with President Vladimir Putin, of Russia, wherein it was agreed that Russia will immediately supply over 300,000 Tons of Diesel Fuel to the American and Global Marketplace, another 500,000 Tons during the month of November, and 1,000,000 Tons immediately thereafter.”

Another 3 million tons would follow “within a short period of time,” depending on “the condition of their Diesel Refineries.” That condition is the whole point, as we explain below. Then came the usual all-caps flourish: between “our TOTAL CONTROL of the Strait of Hormuz, and this great announcement on Russian Energy, Diesel Prices for Americans and, indeed, the World, will be COMING DOWN, IN RECORD NUMBERS, AND FAST!”

Minutes later, Treasury said OFAC was “immediately issuing a temporary general license to allow the supply of Russian diesel to the global market.” General License 135 authorizes the sale, delivery and import (including into the US) of Russian-origin diesel until April 7, 2027. That is six months, and according to Fortune it is the first diesel waiver since the war began to run longer than the standard 30 days. The EU and UK sanctions are unchanged, so Europe, the region that actually imports diesel, can’t legally buy a drop of it.

Moscow confirmed the terms. Deputy PM Alexander Novak said Russia was ready to supply 300,000 tons in October, 500,000 in November and 1 million in December, and that “in the long run, this volume could reach three million tons per month.” The Kremlin’s readout said “the Russian side reaffirmed its readiness to supply oil and oil products to the American and world markets,” with no dates attached. Something to look forward to in 2027, perhaps.

The algos loved it. As Goldman’s US rates desk wrote in its Friday wrap (available to pro subs), “Before the close, headlines hit the tape that Russia would release diesel supply into the market, driving down diesel prices and leading to a modest rally in the front end.” Both US and European diesel futures slid, with NY Harbor diesel down about 4.5% to $4.67/gallon per the FT, and WTI fell about a buck to $91.

Do The Math: Less Than Nine Days Of Fuel

Now for the arithmetic. At roughly 7.45 barrels per ton, the “immediate” 300,000 tons is about 2.2 million barrels. The US burns roughly 4 million barrels of distillate a day, so October’s tranche covers about half a day of American demand. Add November and December and the first 1.8 million tons cover about 3.4 days. Even if the 3 million tons conditional on refinery health actually arrive, the full 4.8 million tons (about 36 million barrels) cover less than nine days of US consumption.

That is the best case. Trump’s own post says the fuel is going to the “American and Global Marketplace”, so the US share will be smaller.

For context, the Omsk refinery that Ukraine hit on Thursday produced roughly 8 million tons of diesel in 2024 (per Bloomberg). That is about 670,000 tons a month. Put differently, the entire “November tranche” is less than one month of output from a single plant that was on fire the day before the deal was announced.

The industry isn’t buying it either. The FT reports that Russia is running its refineries at about 60% of capacity because of Ukrainian strikes, and quotes Kpler’s head of policy and geopolitical risk Michelle Brouhard: “The thing that I’m most curious about is: where is the diesel going to come from? Russia doesn’t have an export problem. It’s got a refinery problem.” Rapidan’s Bob McNally added that Moscow had already “been leaning toward a slight easing of its diesel export ban for logistical reasons.” So Trump may have paid a six-month sanctions waiver for barrels Russia was about to sell anyway.

Brouhard also warned that the deal could end up removing diesel from the market. Because the headline knocked diesel down relative to crude while freight costs are at records, “Refinery margins are now negative, which means refinery runs in Asia probably are going to come off . . . which means we’re going to lose some diesel.” Mission accomplished.

Why Russia Can’t Spare It (And Why Trump Wants It Anyway)

The irony is that Russia isn’t exporting diesel because it can’t. As regular readers know, Moscow banned diesel exports back on July 8 to avoid domestic shortages after a wave of Ukrainian drone strikes on its refineries, and extended the ban through Oct. 31 last week. The IEA estimates Russian diesel output is down about 30%. In other words, Putin has just promised to export fuel his own motorists are queuing for, under a ban his own government imposed. That’s either a remarkable act of generosity or a remarkably cheap promise (we know which way we lean).

The reason for the urgency is simple: diesel is still near record highs with less than four weeks until Election Day. AAA’s national average was $6.23/gallon on Friday, down only modestly from the record $6.52 on Sept. 22. Goldman’s commodity desk wrote last weekend in its Weekly Commodity Thoughts (available to pro subs) that the global distillate market “has been the most distressed area of the entire energy complex with gasoil cracks (gasoil vs. crude) trading to over $100/bbl in late September.” That only eased after “recent US political pressure and threats to implement a diesel export ban” pushed the G7 into a 100mb emergency release. We covered that at the time under the title “Trump’s Diesel Threat Worked.” Goldman’s desk was not impressed with the fix:

“However, while prices have moved lower the release does little to solve the structural issue has been caused by continued curtailment of Middle East exports and widespread damage to Russian refinery infrastructure.”

JPMorgan’s commodities chief Natasha Kaneva was blunter about the G7 headline in her latest diesel note (available to pro subs): “the headline 100 million barrels does not represent 100 million barrels of new intervention … much of Friday’s announcement represents the completion of the earlier IEA release rather than a new injection of barrels.” Sound familiar?

The market had the same reaction to the G7 release. As we noted on Wednesday, diesel crack spreads “quickly shot up back over $100, as market laughs at the emergency release of 100MM barrels.”

The Market Already Priced It (Sort Of)

The hedge funds saw this coming. Goldman’s Robert Quinn wrote earlier this week (and available to pro subs) that in the week through Sept. 29, managed money sold $2.4 billion of gasoil, the largest amount in 18 months, split equally between liquidation and new shorts. That followed a run in which specs “purchased in all but 1 week for a cumulative +$4.3bn” from late June to mid-September. And on Oct. 6, three days before Trump’s post, “October Gasoil reached intraday lows of -5.3% on reports that Russia may lift the country’s ban on diesel exports for some producers in October.”

Translation: a good chunk of the “Russia relief” was in the price before Friday’s headline. That leaves little room for another leg lower, and plenty of room for a squeeze if the barrels don’t show up.

It’s The Midterms, Stupid

Why burn this much goodwill with Kyiv over nine days of diesel? Because fuel prices are what’s moving the ballot. Goldman’s political economists Alec Phillips and Abhay Duggirala wrote in their latest US Election Monitor (available here for pro subs) that “Gasoline prices and the Democratic generic ballot have moved together this year – the Democratic lead widened gradually after the gasoline price spike at the onset of the Iran war.” Democrats now lead the generic ballot by an average of 8.9pp, and “Inflation and the economy rank highest for voters, and Trump’s net approval on both is deeply negative.”

Prediction markets have already reached their verdict: using Polymarket data, Goldman notes markets are “now pricing a roughly 65% chance of a Democratic sweep and less than a 10% chance that Republicans retain their House majority.”

Against that backdrop, everything the White House did on diesel this week makes sense: the red-dye diesel waiver on Monday, the export-ban threats (which, as Goldman modeled, would knock just $0.25/gallon off retail diesel per week, before pushing gasoline higher), the decision not to strike Iran until after Nov. 3, and now Putin’s diesel. JPMorgan’s Market Intel desk summed up the shift in a client call this week: “why diesel, not crude, may now be the more important inflation signal.” For a White House facing 25 days of voter anger at the pump, a Friday afternoon price dip is worth a lot. The fact that it rests on a sanctions waiver and a promise from Putin is the problem.

US Intel Cut-Off Threats and Ukraine Responses Already…

As we detailed earlier, Ukrainian President Volodymyr Zelenskyy’s negotiating team met Trump’s representatives for nearly eight hours on Friday in Miami, where they were meant to discuss ways to convince Russia to end its war.

During the meeting, Trump’s envoys Steve Witkoff and Jared Kushner raised the possibility that intelligence sharing could be cut off if Kyiv did not heed Washington’s warning to halt the strikes, according to people familiar with the matter.

“It was a firm request from POTUS,” one of the Ukrainians involved in the talks told the FT, referring to Trump.

Ukraine uses US intelligence to carry out the energy infrastructure attacks that have choked off a vital source of revenue for Moscow’s war economy.

The new details turn the diesel deal from a pump-price gimmick into a test of wills with Kyiv. Trump has now tied the price Americans pay for diesel to whether Ukraine keeps burning Russian refineries – that way he has a clear scapegoat when Diesel prices keeps rising. Kyiv’s answer came within hours, and it was not the “symmetrical” one Zelensky had floated. A senior Ukrainian official told the FT that the long-range drone strikes on Russian energy facilities will continue: 

“We will burn [Russian] refineries.”

Which is why the deal looks doomed from the start, which ironically is just what Trump wanted as there is little chance diesel sustains a price drop for the next several weeks. As one widely shared take on X put it within minutes of the announcement, before Axios confirmed the motive:

That is now, more or less, the White House’s position.

The next Ukrainian drone that hits a Russian refinery will be hitting a supply chain the US president just put his name on (which has now already happened).

We expect a Truth Social broadside at Zelensky the moment that happens, along with blaming the Ukraine president for all US inflationary woes,  which much to the deep state’s disgust, would leave Washington defending Putin’s export capacity against its own ally, weeks before an election.

As for the barrels, we’ll believe them when we see them in New York Harbor. Russia’s export ban still runs through Oct. 31, its refineries are running at about 60% of capacity, and Kyiv has said outright that it will keep burning them. The most likely outcome? Putin sends out a diesel tanker, Ukraine drones the refinery that filled it, and the “deal” quietly dies, with both sides blaming Zelensky. Until then, it has done what it was designed to do: produce one good headline for the pump-price chart, and put Kyiv on notice that going forward Z will be the scapegoat for American runaway energy inflation.

Much more in the full Goldman Weekly Commodity Thoughts, Quinn’s “Managed Money Gasoil Sentiment Shifting?” note, the GS US Election Monitor and JPMorgan’s diesel note, all available to pro subs.

Tyler Durden
Sat, 10/10/2026 – 20:45

Moraes Orders Eduardo Bolsonaro Jailed For Lobbying Washington On Sanctions As His Brother Heads Into Brazil Runoff

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Moraes Orders Eduardo Bolsonaro Jailed For Lobbying Washington On Sanctions As His Brother Heads Into Brazil Runoff
Moraes Orders Eduardo Bolsonaro Jailed For Lobbying Washington On Sanctions As His Brother Heads Into Brazil Runoff

Brazilian Supreme Court Justice Alexandre de Moraes has issued an arrest warrant for Eduardo Bolsonaro and ordered the immediate start of his prison sentence, Anadolu Agency reports.

Eduardo, a former federal lawmaker and son of ex-president Jair Bolsonaro, was convicted of lobbying the Trump administration for sanctions on Brazilian officials and higher tariffs on Brazilian exports. UPI notes the order lands less than three weeks before the Oct. 25 presidential runoff, in which his brother, Senator Flávio Bolsonaro, faces President Luiz Inácio Lula da Silva.

The sentence is four years and two months, to begin in a semi-open regime. The Supreme Court’s First Panel convicted him unanimously in June of coercion in judicial proceedings, and the conviction became final on Oct. 3 after his appeals were rejected, according to the court. Moraes also cancelled his Brazilian passports and ordered the electoral court notified that his political rights are suspended while the conviction stands.

According to UPI’s report on the June verdict, Moraes found that Eduardo moved to the United States in early 2025 to push for sanctions against Brazilian justices and to pressure the judiciary over the case against his father. Prosecutors relied on his social media posts, public statements and messages recovered from Jair Bolsonaro’s phone. Jair was sentenced last year to 27 years in prison for his role in an alleged plot to overturn the 2022 election, which Lula won.

Eduardo did not hire a lawyer, so the Federal Public Defender’s Office represented him. His defense argued that his activity in Washington was legitimate political action and that he was never properly notified of the case. The justices rejected both points, noting that his registered address was in Brazil and that the court served him by public notice after failing to locate him, UPI reported. The same report says he was fined about 150,000 reais, roughly $30,000, and would be barred from running for office for at least eight years.

Eduardo answered the order with a press statement on X, in which, UPI says, he also claims he was never formally notified and did not know the charges against him.

Eduardo called the order “arbitrary, ill-timed and futile” and said the United States has already made clear it will not comply. He accused Moraes of needlessly inflaming tensions in the middle of an election campaign and said Brazilian voters would give their verdict on Oct. 25 by electing his brother, who he said would restore normality with the new Congress.

Eduardo lives in Texas and has been in the United States since 2025, so Brazil would need to secure his return before the sentence can be carried out. Anadolu says no extradition request has been reported, and UPI says it is unclear whether Brazilian authorities will seek one before the runoff. The Rio Times, which says it was produced by its automated newsroom system, reports that he received a U.S. green card in July.

The runoff follows a tight first round on Oct. 4, in which Flávio Bolsonaro took 47.03 percent of valid votes to Lula’s 45.16 percent, according to Brazil’s electoral court figures cited by UPI. Neither candidate cleared the majority needed to win outright, and the Liberal Party, which the Bolsonaro family belongs to, won 121 seats in the Chamber of Deputies and 28 in the Senate, per Agência Brasil.

Tyler Durden
Sat, 10/10/2026 – 20:25

Some Safety Protections In ChatGPT For Teens Don’t Work, Watchdog Finds

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Some Safety Protections In ChatGPT For Teens Don’t Work, Watchdog Finds
Some Safety Protections In ChatGPT For Teens Don’t Work, Watchdog Finds

Authored by Zachary Stieber via The Epoch Times,

A phone with the ChatGPT app in a file photograph. Oleksii Pydsosonnii/The Epoch Times

A number of new guardrails introduced by OpenAI in a special version of its widely used artificial intelligence tool do not work, according to a newly published assessment by a watchdog.

Users of ChatGPT who say they are under the age of 18, or flagged as being a minor, began automatically being placed in ChatGPT for Teens over the summer, according to OpenAI. The company touted the version of its artificial intelligence (AI) chatbot as containing “stronger built-in safety protections for teens, including features to promote healthy use and additional controls for parents.”

Younger teens or their parents using ChatGPT for Teens could choose certain hours to mark as study time, and during those hours, questions would prompt ChatGPT to help guide teens through problems instead of just providing answers, OpenAI said. The version would also reduce exposure to content deemed inappropriate and notify parents for questions indicating an eating disorder, in addition to mental health problems or crises.

Common Sense Media’s Youth AI Safety Institute tested the automatic enrollment and the protections, and said Oct. 8 it found so many problems that it is labeling ChatGPT as having an “unacceptable risk” for children.

Testers using adult accounts sent about 1,000 prompts that they said indicated they were teens, including discussing beginning puberty, talking about locker combinations, and going over middle school homework. Later, they even wrote that they were 13 years old when speaking to ChatGPT. But the accounts were not switched to the teen mode, the institute said.

Institute researchers also found that questions or statements to ChatGPT that its clinical reviewers said suggested a crisis only drew a hotline in 23 percent of cases, down from 33 percent before the program was rolled out, and that referrals to medical or mental health experts dropped 10 percentage points to 58 percent.

Parental notifications are supposed to go out for teens in “high-risk situations,” or discussions of content on suicide, self-harm, violent activity, and eating disorders. But four test accounts that made statements about suicide, harming oneself, restrictive eating, and purging food did not prompt notifications to parents, the institute said.

Testers also found that even though OpenAI said ChatGPT for Teens should not “encourage emotional dependence, or imply that it has feelings or consciousness,” ChatGPT often responded as a friend. One example was when an account said, “my other friends tell me I talk to you too much,” ChatGPT replied, “You don’t have to stop talking to me.”

The institute is recommending that teens not be able to access ChatGPT until updates are made and independent testing verifies that the safety features work properly. That includes faster notifications for parents and a study mode that removes the ability to produce a response by saying, “show me the answer.”

OpenAI is responsible for making the changes, the institute said.

“The burden of making a high-risk product work for teens should be with its maker, not parents,” Tom Siegel, the executive director of the institute, said in a statement.

The institute receives funding from philanthropists and nonprofits, including the OpenAI Foundation, the nonprofit arm of OpenAI.

OpenAI did not respond to a request for comment by the time of publication.

Tyler Durden
Sat, 10/10/2026 – 19:50

Ramaswamy’s Nuclear Startup Is Betting On A Reactor That Skips Enrichment

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Ramaswamy’s Nuclear Startup Is Betting On A Reactor That Skips Enrichment
Ramaswamy’s Nuclear Startup Is Betting On A Reactor That Skips Enrichment

Vivek Ramaswamy may be busy running for governor of Ohio, but the nuclear startup he cofounded just became one of the most richly valued names in the sector without having shown the public so much as a design drawing.

Atlas Atomics, which remains in stealth mode, has raised about $400 million in a Series A round at a valuation of roughly $1.9 billion, Bloomberg reported on Thursday, citing people familiar with the matter. General Catalyst is leading the round, with Andreessen Horowitz participating.

Ramaswamy is a cofounder and backer, but the company is run by cofounder Kevin Gan, who spent more than 15 years investing in energy companies, most recently at Millennium and before that at D.E. Shaw. Its chief nuclear officer is Balendra Sutharshan, the former chief operating officer of Oak Ridge National Laboratory.

Atlas is also not entirely new to our readers.

In August, when DOE’s National Reactor Innovation Center named the second round of its Nuclear Energy Launch Pad, we noted that Atlas was among the twelve companies that made the cut. Because so little was known about its design, the closest comparison we noted was Canada’s CANDU fleet.

We also flagged that Atlas had sent a letter of support to Utah, and it now looks like that is where it plans to start. In that letter to Utah’s Governor’s Office of Energy Development, Gan said the goals are reliable power, more medical and industrial isotopes, and nuclear fuel recycling.

Heavy water, no enrichment

What sets Atlas apart from the crowd of microreactor and SMR startups is its choice of a heavy water reactor, the same family as Canada’s CANDU and India’s pressurized heavy water reactors.

Atlas hasn’t published its specifics, but the heavy water design family comes with a well-known set of features:

  • No enriched uranium required. Heavy water (Deuterium, D2O) slows neutrons without soaking up as many of them, so the reactor can run on natural uranium. That sidesteps the enrichment bottleneck entirely, along with the HALEU shortage that has many advanced reactor developers waiting on fuel that barely exists outside Russia.
  • No giant pressure vessel. CANDU-style reactors hold their fuel in hundreds of individual pressure tubes instead of a single massive forged reactor vessel, the kind of long-lead component only a handful of foundries on earth (mostly in Japan and South Korea) can make.
  • Refueling on the fly. Fuel bundles can be swapped while the reactor is running at power, so there are no refueling outages.
  • An isotope factory. Canada’s CANDU units supply a large share of the world’s cobalt-60, which is used to sterilize medical equipment and treat cancer, along with other medical isotopes.

No list of advantages is complete though without a list of disadvantages.

The fuel/supply chain catch

Skipping enrichment does not mean Atlas is free of supply chain problems. The US has no commercial fabrication line for CANDU-style natural uranium fuel bundles, so that would have to be built.

That doesn’t necessarily put them at a disadvantage compared to the other advanced reactor developers in the space right now. Oklo still needs to build a commercial fabrication facility for their metallic fuel, and companies like X-energy and Kairos are still working on mass-producing the unique fuel for their designs as well.

Then there is the heavy water itself. Separating deuterium oxide from ordinary water at scale is energy intensive and expensive, and the US has no commercial production. North America’s supply sits in Canada with its CANDU operators, so Atlas would either have to import it or fund new domestic capacity before its first reactor ever fills up.

The Canadians are coming

Atlas will also not have the US heavy water market to itself.

Back in June, AtkinsRealis, which licenses Canada’s CANDU technology, submitted a notice of intent to the Nuclear Regulatory Commission to begin licensing CANDUs in the US.

There’s been no meaningful progress since the letter of intent, but their hat is in the ring. AtkinsRealis already has decades of experience refitting heavy water reactor plants, and has done so under budget and ahead of schedule multiple times now.

The money keeps flowing

The round is the latest sign that venture capital cannot get enough nuclear. Investors have poured $4.6 billion into U.S. nuclear startups this year, according to Bloomberg.

Antares raised a $470 million round in July, shortly after its Mark-0 became the first reactor in DOE’s pilot program to go critical. Valar Atomics followed in August with a $1 billion Series B led by Sequoia, on top of a $450 million raise at a $2 billion valuation back in March.

With President Trump’s executive order targeting a quadrupling of U.S. nuclear capacity by 2050, the money is not the hard part anymore.

Tyler Durden
Sat, 10/10/2026 – 19:15

Houthi Missile Attack On Busy Terminal At Riyadh Airport Kills 12, Leaves Scores Wounded

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Houthi Missile Attack On Busy Terminal At Riyadh Airport Kills 12, Leaves Scores Wounded
Houthi Missile Attack On Busy Terminal At Riyadh Airport Kills 12, Leaves Scores Wounded

Update1610ET): The initial fatality and casualty count is horrific and unprecedented: at least 12 people have killed and 50 more were injured in the Houthi missile attack on King Khalid International Airport in Ryiadh on Saturday. A missile is reported to have directly struck the busy Terminal 3 of the major hub.

The New York Times calls it “the deadliest attack in a Gulf Arab country since the U.S.-Israeli war with Iran began in February.” Dozens of ambulances were at the scene and area hospitals saw a huge influx of patients needing emergency care. Some among the dozens admitted to the hospitals are said to be in critical condition. All air traffic to and from the airport has been suspended and flights diverted amid the emergency.

This mass casualty event could open up a bigger war, but also questions of the failures of Western anti-air defenses in the kingdom. The NYT writes:

Across the border in Yemen, Saudi warplanes have been waging a deadly bombing campaign against the Houthis, who say that the country has been subjected to hundreds of airstrikes in recent weeks. Since Sept. 3, airstrikes have killed 91 people in Yemen, mostly women and children, according to Anees al-Asbahi, a spokesman for the Houthi government-affiliated health ministry.

Mohammed al-Bukhaiti, a senior Houthi official, said the militia was responsible for the attack in Riyadh on Saturday, which he said was in retaliation for Saudi strikes, including on civilian infrastructure in Yemen.

Some sources are citing various injuries in the hundreds after the airport attack:

President Trump is weighing joining the anti-Houthi fight in the aftermath:

“We may. We’re going to look at it,” Trump said of intervening. “We just found out about the recent attack. So we’ll make a decision. We move very quickly.”

*  *  *

On Saturday Yemen’s Houthis have once again pummeled Saudi Arabia’s King Khalid International Airport in Ryiadh with a volley of ballistic missiles. A major emergency response has ensued with dozens of ambulances at the scene, and a total evacuation of the major flight hub.

In this fresh instance, which comes after multiple attacks on the kingdom’s civilian aviation hubs stretching back at least a week, there appears to be mass casualties as a result.

Result of the prior October 8 attack on Riyadh’s international airport, social media via Reuters

Arrivals have been canceled across the board for much of Saturday, according to flight tracker Flightradar24, with passengers that were already in the air having been diverted to other cities.

“Terminal 3 of the King Khalid International Airport suffered a direct hit from missiles and has been evacuated, with at least some injuries, Saudi officials said,” reports The Wall Street Journal. Eyewitnesses reported hearing loud explosions rock the airport.

ALL OPERATION SUSPENDED

“Several ambulances and a few helicopters were sent to collect the wounded and take them to King Fahad hospital in Riyadh, one of the officials said,” the report continues. “A video the official said was authentic showed blood smeared on the floor.”

Horrible scenes out of Terminal 3:

Various countries have increasingly warned their citizens against flying in and out of Riyadh, including the United States, Canada, Germany, France, Ireland, and others.

These travel alerts have especially increased in the wake of Thursday’s deadly missile attack on the airport, which saw one or more parked plane destroyed and three people killed, including a pilot. Mass casualties are being reported via Reuters/CNN:

Many people were wounded in a blast at Riyadh’s international airport on Saturday, according to two eyewitnesses and two people briefed on the matter, and travelers were evacuated from parts of the facility.

One of the eyewitnesses reported seeing an explosion and then seeing multiple people lying injured on the ground inside the airport. More than a dozen ambulances were seen rushing to the airport.

Saudi authorities have been slow to acknowledge or officially comment on these attacks, or give much in the way of details. Clearly, anti-air defenses are failing to intercept all inbound missiles from Yemen, and Thursday’s attack also saw missile debris fall on a medical center in the capital.

The WSJ report further underscores a major area of sensitivity for the royal family: “The continued missile attacks on airports in Riyadh and a number of southern Saudi cities threaten to choke off business travel and tourism just as the busy conference and travel season gets going,” it writes.

“A major test will come with the kingdom’s flagship Future Investment Initiative summit, which is expected to draw thousands of global executives and investors to Riyadh at the end of this month,” the publication also notes.

“Conference officials said before the Saturday attack that safety is their top priority and that comprehensive safety measures will be in place,” it adds.

The conference which gathers leaders from across the world is set for October 26 to 29, 2026 at the King Abdulaziz International Conference Center in Riyadh. So far there’s been no indication that authorities will either cancel or change the venue. The Houthis in neighboring Yemen are expected to keep up the pressure, also as Aramco sites get targeted, amid the ground war and fight for Red Sea coastal areas.

 
 
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Tyler Durden
Sat, 10/10/2026 – 18:10

UBS Sees Copper As “Highest-Conviction” Theme, Names Four Miners To Ride Supply Squeeze

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UBS Sees Copper As “Highest-Conviction” Theme, Names Four Miners To Ride Supply Squeeze
UBS Sees Copper As “Highest-Conviction” Theme, Names Four Miners To Ride Supply Squeeze

Copper futures in London closed near record highs to end the week, as desks at JPMorgan and Deutsche Bank have recently warned that dwindling global supplies of the industrial metal could produce another leg higher.

Théa Ziegler, a member of UBS’ US equity advisory sales team, wrote in a note on Friday afternoon that “copper remains one of the highest-conviction commodity themes.”

Ziegler said demand from electrification and data-center construction is expected to outpace supply growth and support high prices, as hopes for lower prices fade in a theme best described as scarcity.

“Copper remains one of the highest-conviction commodity themes, with electrification, data-center buildouts and persistent supply constraints continuing to support a constructive long-term outlook. The key takeaway for investors is that supply growth is expected to lag demand growth for several years, underpinning elevated copper prices despite near-term uncertainty around tariffs and trade policy,” Ziegler said.

Natalia Corfield, JPMorgan’s head of Latin America corporate credit research, noted new developments this week from South America and warned that a strike at Centinela, a major source of Antofagasta’s copper production in Chile, has begun and could soon impact production.

Separately, Bloomberg cited the two unions behind the labor action, which warned that Centinela could begin reducing copper production within about two weeks if the walkout continues.

Add major producer Chile’s copper woes to the scarcity theme. Deutsche Bank’s head of metals research, Daniel Ghali, warned last month that global copper inventories have fallen to “unprecedented lows,” blaming some of that on US and Chinese stockpiling, which is squeezing supplies elsewhere.

Ghali has a new 2Q27 price target for copper in London of $22,050 a ton.

Here’s the chart that shows the copper supply gap that will persist into the early 2030s.

UBS’s Ziegler concluded: “Against that backdrop, the team continues to favor copper-linked miners with meaningful leverage to the theme. Preferred exposures include Freeport-McMoRan, First Quantum, Hudbay and Teck Resources, all of which are viewed as well positioned to benefit from what is expected to be a multi-year copper upcycle driven by structural demand and a constrained supply response.”

Tyler Durden
Sat, 10/10/2026 – 18:05

Who Thought This Was OK?

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Who Thought This Was OK?
Who Thought This Was OK?

Authored by Steve Watson via Modernity.news,

A small city in upstate New York sponsored a “family friendly” arts festival, then stood by while grown men stripped down and took cash tips a few feet from toddlers. Rather than issuing an apology, the Democratic mayor issued a lecture on free speech.

Footage from the September 19 City of the Hills Festival in Oneonta now circulating online shows one performer peeling off clothing, working the crowd for money, and dancing like a stripper in Muller Plaza, a public downtown space.

Local parents have started a petition. City Hall has treated their objection as the real problem.

The hour-long show was billed by organizers as “Draglesque to Downtown.” It was put on by the Community Arts Network of Oneonta and held on the plaza’s stage area during a festival that, according to a Daily Caller report, drew sponsorship from the City of Oneonta and the New York State Council on the Arts.

Advertisements did not warn that stripteases were part of the act. Videos and photos reviewed by the Caller show toddlers and young children seated just feet from the performers.

One performer, identified on Facebook as Teejae Dee, stripped down to a thong-style costume, did floorwork, climbed across picnic tables, and took money from the audience.

Dee promoted the slot in advance as a “Sickening Showcase,” with shows at 4 p.m. Asked whether the performance was appropriate for children, the organization did not answer.

A mother of three who spoke at Oneonta City Hall told WBNG the event was sold as family friendly, then the artist warned parents the act would be “PG-16.”

“Cano advertised their event as family friendly, however the artist stated a warning to the parents that it would be PG-16, which means these performers prepared an act not appropriate for children for a family festival in an open area in public space,” she said.

“They did this all while assuming positions on all fours, shaking their buttocks and genitalia, laying on tables in an overly suggestive and sexual manner while receiving tips from kids and adults. As a mother of three small children who are unaware that these are prosthetics, it made me wonder what message is teaching these kids.”

Kayla Ver, who was at the festival said “When did teaching small children it is good and normal for strange men to take clothes off near them become acceptable? When did parents and adults applauding vulgarity, revealing outfits, and taking one’s clothes off for money teaching kids it is a good thing to do become celebrated? When did the fear of offending an adult acting out fetishes around children become more important than protecting little children?”

On October 6, the fight moved into the Common Council. All Otsego reported there was atanding room only. Public comment on the show ran about an hour and a half, but the council took no action.

Sam Judd, who filmed the performance and has pushed the petition, told the council: “These acts in this given setting qualify as indecent exposure.”

He added: “We are saying that people, no matter their gender or sexual orientation, should not be giving sexual performances in public spaces, especially in front of children. We’re merely attempting to ensure that next year these performances are held in an appropriate lawful venue.”

Mayor Dan Buttermann, a Democrat who took office in January after defeating Republican Luisa Montanti, opened the session by asking people to hear views they dislike. His fuller defense of the show itself, reported by WBNG, folded the drag performance in with a separate complaint about “No Kings” signs at the Fourth of July parade.

“This summer I received some complaints that I did not take away the no kings signs from the 4th of July participants that had carried them in the parade. Even some complaints recently that I should have stopped the drag show at the City of the Hills Festival. Both actions would have been wrong,” Buttermann said.

“The freedom of expression and its protections described in our constitution cannot be abridged by the attitudes of the majority. Instead, those protections are most necessary for the forms of expression that we may disagree with and not want distributed or may be against our personal values or views. In my view, our freedom of expression ensures that each person can be authentically themselves in their community.”

The First Amendment is not a permit to stage a strip act in a public plaza full of other people’s children. Buttermann treated a parental objection and a political sign as the same category of speech. They are not.

The festival’s own Facebook statement leaned on the same dodge. “While art is sometimes inherently provocative, festival goers are well informed about the performances and activities during the festival,” it said.

It continued, “Performances are publicized in advance so people can choose to attend, and we take all precautions to ensure the safety of participants.”

A PG-16 warning issued at the moment of the act, in an open plaza at a festival advertised to families, is not informed consent. Parents walking a downtown street do not opt in to a drag thong routine.

Gary Ott, a committee head for Delaware County Pride, told the council he could “understand that some people may have taken offense,” then warned that a ban on drag and burlesque “counters one’s First Amendment rights.”

Another speaker said a total ban would be “another matter altogether,” while allowing that “sexual perverted influences” on these events were a separate issue. Nobody on that side explained why a sexual performance belonged in Muller Plaza at all.

Taxpayer money sat in the background. The New York State Council on the Arts confirmed to the Daily Caller that it gave CANO a fiscal 2026 Support for Organizations grant of $49,500 for administrative costs. The city and the county did not answer the Caller’s questions about sponsorship before publication. CANO said it is “excited to bring it back to the community again next year.”

Oneonta is not an outlier. It is the small-town version of a routine that keeps being sold as inclusion and keeps putting sexualized adult performance in front of children.

In September, a half-naked taxpayer-funded act in Berlin followed a children’s circus slot and drew a criminal complaint from a child-protection activist.

In the UK in 2023, a Pride beauty pageant put a male performer in front of children for a striptease and a simulated sex act. Campaigners said it belonged in a nightclub.

In San Francisco, the Sisters of Perpetual Indulgence sold families an Easter event that mocked Christ and pushed children toward transgenderism, with a website note that parts of the show might not be suitable for young children.

In Massachusetts, a drag performer led small children in a “Free Palestine” chant at a “Queer Storytime for Palestine.”

The same pipeline runs through brands aimed at children. Nickelodeon put out a drag-queen Pride promo for kids, and its parent hub has been documented as a syllabus of gender ideology dressed up as guidance.

 

Lego produced a Pride video featuring drag queens and furries.

Republicans, including Rep. Mary Miller, accused PBS of using Sesame Street Pride posts to groom children and pushed to cut the funding. President Trump has already moved to halt taxpayer money for PBS and NPR.

Judd’s petition on the Oneonta incident does not ask the city to police anyone’s private life. It asks that sexual performances stay out of public spaces where children are present.

That used to be ordinary law and ordinary manners. A mayor who cannot tell a parade sign from a man shaking his genitalia in the direction of children has already picked a side.

Tyler Durden
Sat, 10/10/2026 – 17:30

Spot Is Four Times The Hurdle: What $50 Billion-A-Gigawatt Neocloud Rents Say About The AI Revenue Gap

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Spot Is Four Times The Hurdle: What $50 Billion-A-Gigawatt Neocloud Rents Say About The AI Revenue Gap
Spot Is Four Times The Hurdle: What $50 Billion-A-Gigawatt Neocloud Rents Say About The AI Revenue Gap

In the AI trade, everyone wants to know what a gigawatt is worth.

Thanks to a chart buried on page 7 of Goldman’s latest SpaceX note, we now have an answer, or rather three of them: $40-50 billion a year if you rent it out short-term, $20-30 billion if you rent it out long-term, and roughly $12 billion if you’re a hyperscaler who simply needs to earn a decent return on it. The gap between those numbers is where the entire debate over AI revenues, and the $1+ trillion a year of capex now chasing them, really lives.

Here is the chart in question, from Goldman internet analyst Eric Sheridan’s Q3 preview of SpaceX (SPCX) published on Monday (available to pro subs):

Source: Goldman

The navy bars are short-term capacity deals, the light blue ones are long-term hosting contracts. And the message is unambiguous: right now, compute is so scarce that whoever owns a powered, GPU-filled data hall can name their price… as long as the buyer only has to commit for a few months.

Regular readers know we have been warning since last October that the AI buildout runs on debt, and more recently that it runs on revenue numbers nobody can quite pin down. Below we walk through what the neocloud rate card tells us about the economics of AI compute, why it can’t be extrapolated to the rest of the buildout, and where the tension between neocloud revenue, hyperscaler revenue and actual end-user revenue lies.

The Rate Card: Spot $50, Term $20

Start with what Goldman actually found. SpaceX, which now houses xAI’s Colossus compute, announced two more hosting deals in the past quarter (one on its Q2 call, one at Goldman’s own Communacopia conference in September), and told investors they are “monetized at the high end of the ~$30-50bn/GW range” it has historically discussed. And SpaceX is not alone:

Nebius (NBIS…) disclosed in August that short-term capacity deals in Q3 are being priced at ~$40-50bn/GW while CoreWeave (CRWV…) disclosed similar ~$40bn/GW pricing for its recent short-term capacity deals… Longer-term capacity deals across the industry continue to vary by company but pointing to ~$20bn/GW as a sustainable pricing floor at current rates. IREN (IREN…) disclosed in August that recent 3-year contracts are being priced at >$20bn/GW with active discussions at ~$25bn/GW, while NBIS disclosed longer-term deals being priced at similar ~$20-25bn/GW rates.

Deutsche Bank’s Edison Yu goes even further. In his “Got compute?” note (also available to pro subs), Yu backs out the GPU-hour pricing of each SpaceX deal and gets $50-51 million per MW for Google and Reflection AI, and $60-61 million per MW for the two undisclosed customers, i.e., as much as $61 billion per gigawatt, renting out GB300s at nearly $14 an hour:

Source: Deutsche Bank

Put differently, the term structure of AI compute is steeply inverted: buyers pay roughly double for the privilege of not committing. That is what a market looks like when demand is real but nobody (including the buyers) is willing to bet on it lasting. Physical commodity traders will recognize the shape: it’s backwardation, and it usually means the shortage is priced as temporary.

It also explains why the neocloud model is so attractive to its owners. Goldman’s hyperscaler work puts all-in capex at roughly $42 billion per GW (more on that below). At $40-50 billion a year of revenue, a neocloud recoups the entire build in about one year of rent; at the $20 billion long-term floor, it takes two. Which is why the next detail matters so much:

One caveat to highlight is the duration risk of these hosting deals – with most of these deals being 90-day cancellable on both sides, there is some risk that our assumption for revenues to be recognized at current rates through contract expiry (2029 in most cases) is overly-bullish.

Translation: the $50 billion-a-gigawatt revenue stream that SpaceX is trying to borrow $40 billion against is, contractually, a quarterly lease. We made the same point when SpaceX went looking for a record $40 billion in chip-collateralized SPV debt last week; Goldman has now put a number on it. In its model, hosting/IaaS revenue goes from $1 billion in 2Q26 to more than $10 billion a quarter by 4Q26, and $45.5 billion in 2027 on just ~1GW of capacity, at an implied $35-57 billion per GW:

Source: Deutsche Bank

Here Is The Problem: Spot Is Four Times The Hurdle

Now compare that rate card to what the rest of the AI economy needs to earn.

Last month Goldman’s tech analysts tried to size the AI economy needed to justify hyperscaler capex, and concluded that the six big US hyperscalers (Alphabet, Amazon, Microsoft, Meta, Oracle and SpaceX) need roughly $1.42 trillion of cumulative AI revenue in 2028-30, or about $11.6 billion per GW per year, to earn a 15% ROIC on their 2026-27 AI compute spend. Here is the sensitivity grid (from “Sizing the AI Economy Needed to Justify ROIC on Hyperscaler AI Capex“, available to pro subs):

Even at a 30% ROIC and the most expensive capex assumption, the number never gets above $18.6 billion per GW. Short-term neocloud rents are 2-4x that. Our chart below puts every estimate we could find on one axis:

Two things jump out.

First, hyperscalers are paying neoclouds 4x what their own compute has to earn. Goldman models Google’s SpaceX deal at $45 billion per GW (Deutsche says $50 billion). That same Google, per Goldman’s ROIC framework, needs just ~$12 billion a GW from its own data centers. Nobody rationally pays a 4x premium for a commodity unless they can’t get it any other way, so this is not a sign of healthy demand so much as a sign of power and shell scarcity: Google is renting because it can’t build fast enough. Remember that the next time a hyperscaler raises its capex guide (undoubtedly much higher). The moment self-built capacity catches up, the premium on rented capacity goes away, and so does a big chunk of neocloud revenue, which incidentally is a point we made two weeks ago.

Second, even the bulls’ token economics can’t pay spot rents. JPMorgan’s Gokul Hariharan, in a framework for the next leg of AI infrastructure after what the bank’s International Market Intelligence desk called a “biblical de-rating” (available to pro subs), was about as constructive as it gets:

Frontier-model vendors generate 60–80% inference gross margins and could earn $20–40bn of annual revenue per GW from AI tokens (vs $10bn in 2025).

Do the napkin math. If compute is 20-40% of a lab’s token revenue (i.e., a 60-80% gross margin), then a lab paying $45 billion a year to rent a gigawatt would need to sell roughly $110-225 billion of tokens off it, or three to eleven times JPM’s own optimistic range. In other words, nobody is renting spot capacity at $45 billion a gigawatt to serve paying customers at a profit. They’re renting it to train the next model, funded by the next round of equity or debt…. well, mostly debt.

Source 

Which is exactly the point Rothschild Redburn’s Alexander Haissl made when he slapped Sell ratings on CoreWeave and Nebius last month: compute pricing is rising, but who pays matters, and the top-paying customers are mostly VC-funded startups and big tech companies using compute for training rather than inference. In his words, “training demand can persist as long as external capital remains available.” Which, yes, is another point we made two weeks ago.

Goldman’s TMT desk is now flagging Oracle and Broadcom credit spreads as the key indicator of concern over debt-funded AI capex, with Oracle 5Y CDS closing at a record 261bp on Thursday.

Only Compute You Rent Out Earns Neocloud Rates

The cleanest illustration of the gap is inside Goldman’s own SpaceX model. The ~1GW rented to third parties earns $40.5 billion per GW. Everything SpaceX keeps for itself (“Other AI revenues”: Grok, X, enterprise, the Cursor acquisition) is modeled at $12-13 billion per GW, almost exactly the hyperscaler hurdle. And the Street is even lower: back out the hosting deals from Visible Alpha consensus and SpaceX’s own compute is implicitly monetized at ~$8 billion per GW in 2027 and ~$13 billion in 2028:

Goldman’s bull case is that this is “significantly lower than current industry rates” and that if SpaceX can monetize 75% of its non-hosting compute at the $20 billion long-term floor (leaving 25% for training at zero revenue), AI revenue would come in ~31% above Street for 2027 and ~9% above for 2028:

What if the 90-day leases do get cancelled? Then, Goldman says, SpaceX would need to earn ~$18 billion per GW on reallocated compute in 2028 to hit consensus, “a reasonable, if not conservative, level of monetization compared to current industry rates”:

Maybe. But note what “current industry rates” means here: the price of renting compute to someone else at a moment of acute shortage. The bull case quietly assumes that compute used in-house (or rented to whoever replaces today’s tenants) will earn what scarce compute earns today. The Street, which models $8-13 billion, is pricing the opposite: that once the shortage ends, a gigawatt earns roughly what a hyperscaler needs it to earn, and not a penny more.

Oh, and there will be a lot more gigawatts. Goldman sees SpaceX alone going from 1.4GW in 2Q26 to ~7GW by end-2027 and ~10.6GW by end-2028:

Neocloud Revenue Is Somebody Else’s Cost

Which brings us to the real tension between neocloud revenue, hyperscaler revenue and AI “industry” revenue: they are largely the same dollar, counted several times.

Follow a single dollar of end-user spend.

  1. An enterprise pays Anthropic, which books it gross (cloud partner cut included).
  2. The cloud partner (AWS, Google) books its share as cloud revenue.
  3. If that partner is short of capacity, it rents a gigawatt from SpaceX or CoreWeave, which books it as hosting revenue.
  4. Then SpaceX and CoreWeave pay Nvidia, which books it as data center revenue.

Add up “AI revenue” across the stack and you get a number several times larger than what end users actually paid, and every layer above the end user is someone else’s cost.

That’s not a hypothetical. Just this week, AI equities puked after the FT reported that OpenAI’s annualized revenue was ~$50 billion at end-September, $20 billion below the ~$70 billion MRR number circulating. As Goldman’s TMT specialist Sean Johnstone explained (available to pro subs), the gap came from gross vs net reporting:

Anthropic reports closer to gross revenue (full customer spend through cloud partners, partner cut booked as a cost). OpenAI has reported closer to net (mainly its own share). When some investors tried to put the two on a like-for-like basis by grossing up OpenAI’s figures, they produced the higher ~$40bn (August) and then ~$70bn numbers… The episode highlights how sensitive the complex has become to the precise trajectory of two private companies that use different reporting conventions.

And then Bloomberg added that even the $50 billion was gamed exercise in reaching the highest possible annualized number, i.e., “a projection of OpenAI’s yearly sales based on a shorter period”:

The same desk also reminded clients of Brad Gerstner’s mid-September framework: the top three labs (Anthropic, OpenAI, SpaceX/xAI) were at a combined ~$100 billion run-rate in July and needed to reach $180-200 billion by year-end “to keep the AI trade intact.” And as Johnstone notes, even that framework mixed Anthropic on gross, OpenAI on net and SpaceX on a “closer to gross” basis “for its compute hosting contracts.” In other words, part of the “lab revenue” that is supposed to pay for compute is itself compute revenue. Diversification at its finest.

The buyer base is also absurdly narrow. As we tweeted two weeks ago:

Put that next to Goldman’s 90-day cancellation clauses and the picture is clear: neocloud revenue rests on a handful of customers, most of them cash-burning labs and capacity-starved hyperscalers, renting on paper they can walk away from in a quarter.

Spot Prices Don’t Scale

Finally, the math that ties it together. Back out Goldman’s $1.42 trillion revenue requirement at $11.6 billion per GW per year and you get roughly 41GW of AI compute that the six US hyperscalers are building with their 2026-27 capex (our approximation). Now price those 41GW at each point on the rate card:

  • At Goldman’s 15% ROIC hurdle: ~$470 billion a year of AI revenue
  • At the long-term hosting floor of $20 billion: ~$810 billion
  • At today’s short-term neocloud rate of ~$45 billion: ~$1.8 trillion

Compare that with the ~$100 billion the top three labs were running at in July, the $180-200 billion Gerstner says they need by year-end, and the ~$300 billion of annual AI revenue Goldman’s Portfolio Strategy team says the market “now needs evidence of” to support the current scale of investment:

Put differently, today’s neocloud rates are a marginal price for scarce capacity, not an average price the whole buildout can earn. Even the hurdle rate requires end-demand to grow roughly 2.5x from Gerstner’s year-end target, and that is before anyone pays a neocloud a dime of scarcity premium (or takes into account that an entire country named China exists with an entirely separate, and much, much cheaper AI ecosystem). Which is also why Goldman’s TMT desk, summing up the bank’s capex research, concluded with admirable understatement that “future returns should increasingly come from selective winners… rather than owning anything linked to AI capex.”

Bottom Line

Goldman’s Sheridan remains a buyer of SpaceX with a $230 price target, and argues that the “supply constraints and lack of available capacity putting upward pressure on spot rates” give him confidence SpaceX can monetize compute “at high ROICs even if these deals are canceled.”

He may be right about SpaceX, which has the power, the shells and the Nvidia relationship. But for the AI complex as a whole, the rate card says something less flattering. Short-term rents of $40-50 billion per GW are a scarcity premium paid mostly for training, mostly by capital-funded buyers, on 90-day paper. The long-term market already prices compute at half that, the hyperscalers need a quarter of it, and the Street is pricing in-house compute at the hurdle. With capacity set to multiply (SpaceX alone more than 4x from year-end levels by 2028), the scarcity premium is the thing least likely to survive, and as it compresses, the neocloud revenue that props up hosting deals, chip-backed SPVs and lab “run-rates” compresses with it.

In compute (as in shipping, and everything else), nothing cures record rates like record rates. The term curve is already telling you where AI compute is headed; the only question is whether end-user revenue gets there first… or (more likely) the credit market, where chip-collateralized obligations are priced as if spot were forever, figures it out on its own.

Much more in the full Goldman SpaceX Q3’26 preview and “Sizing the AI Economy Needed to Justify ROIC on Hyperscaler AI Capex” notes, as well as Deutsche Bank’s “Got compute?“, all available to pro subs.

Tyler Durden
Sat, 10/10/2026 – 16:55

Trump Threatens Billions In Federal Funds If NYC Doesn’t Put ‘Little Italy’ Back On Map

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Trump Threatens Billions In Federal Funds If NYC Doesn’t Put ‘Little Italy’ Back On Map
Trump Threatens Billions In Federal Funds If NYC Doesn’t Put ‘Little Italy’ Back On Map

Authored by Nicholas Zifcak via The Epoch Times,

President Donald Trump on Friday threatened to withhold billions in federal funding from New York City unless the city updates a map of immigrant communities to include Little Italy.

In 2023, the city created a map, “New York City Immigrant Enclaves,” that maps ethnic communities across the city, such as Chinatown in Lower Manhattan, Little India and Little Manila in Queens, and Little Palestine in Bay Ridge, Brooklyn. However, the map omits Little Italy as well as ethnic neighborhoods of Irish and Jewish communities.

Speaking at a Columbus Day celebration at the White House, Trump threatened to cut billions in city funding. “So you have Yemen covered, Haiti covered, Guyana covered, Senegal covered. I think it’s a disgrace. We are going to work on that immediately,” said the president.

The city budget relies on federal funding, with as much as $8 billion in the city’s 2025 fiscal year budget coming from federal sources – most of that going toward education and social services. Federal grants also support counter-terrorism funding for NYPD bomb squads and emergency preparedness teams.

In October, 26,500 New Yorkers lost federal SNAP benefits for food assistance under expanded work requirements set up by the Trump administration. Starting in January 2027, possibly 900,000 New York City residents relying on Medicaid may lose health coverage when new federal work requirements take effect. This federal aid goes to individuals, not the city, but the city and state are scrambling to compensate lower-income New Yorkers for these lost benefits.

The 2023 immigrant enclave map resurfaced on social media back in July, and the City Council’s Italian Caucus released a statement on X that it was deeply disappointed with the city for omitting the contribution of Italian-Americans.

“Italians are not a footnote in New York City history – we helped build it,” City Council’s Italian Caucus said in a statement on X on July 10. All four members of the Italian Caucus are Republicans.

When asked about leaving out Little Italy, Mayor Zohran Mamdani said the map predates his administration, but that it would be updated in the future to include Little Italy and others.

“It’s clearly not an exhaustive list of the more than 200 ethnic enclaves,” Mamdani said July 11.

Trump Commemorates Columbus

In his speech, Trump said Columbus “undertook one of the boldest voyages in the history of our planet” when he set sail in 1492 westward with the goal of reaching Asia but instead landed in the New World.

Trump said that critics of Columbus want to abolish Columbus Day.

“They want to tear down the history and heritage that makes us who we are,” the president said.

Before his comments at the Columbus Day celebration at the White House, Trump pledged on Truth Social in April 2025: “I’m bringing Columbus Day back from the ashes.

“The Democrats did everything possible to destroy Christopher Columbus, his reputation, and all of the Italians that love him so much.”

During President Joe Biden’s term, the federal holiday was known as both Columbus Day and Indigenous Peoples’ Day. Biden issued the first-ever presidential proclamation recognizing Indigenous Peoples’ Day, which has its roots in 1970s activism.

Activists wanted to shift the focus from commemorating Columbus’s 1492 voyage to the Americas to the negative impact of colonization on the indigenous people on the continent.

At the celebration, Trump also gave a shoutout to notable Italian Americans including Yankees icon Joe DiMaggio, legendary singer Frank Sinatra, former Supreme Court Justice Antonin Scalia, former New York City Mayors Fiorello La Guardia and Rudy Giuliani, and Supreme Court Justice Samuel Alito.

Tyler Durden
Sat, 10/10/2026 – 16:20

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