| Plus: the oil glut, Gemini and more. |
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| Hey readers, welcome back to The Forecast from Bloomberg Weekend. Thanks for your emails last week in response to the all-optimism edition! If you’re looking for more optimism, Bloomberg Originals’ video series An Optimist’s Guide to the Planet is back for a second season. As a reminder, starting next month, this newsletter will be available exclusively to Bloomberg subscribers. If you already subscribe, you’re all set. If you’re not a subscriber, we hope you’ll consider becoming one. Otherwise, you’ll receive your last edition of the Forecast on Nov. 9. This weekend we’re looking at OpenAI’s video app Sora — plus the coming oil glut, the disaster economy and AI making bands sound better. Also, the week ahead will be busy — with rate decisions by the Fed and ECB, earnings from several of the AI “hyperscalers,” a Trump-Xi meeting and more. | |
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Sora Isn’t a TikTok Killer | |
 Screenshot from video from Sora 2 press video “rocket in space” Source: Sora 2 There’s a running joke on TikTok: “Excellent use of free will.” It’s what people comment when someone has devoted time to something unnecessary and occasionally brilliant — a man who covers popular songs on a DIY organ made of rubber chickens, a woman who shaves her head to spin a yarn hat from her own hair, a guy who spent 21 years making a balsa wood model of every building in New York City. For philosophy nerds, the free will comment is a character-limited treatise on human agency: our capacity to choose, pointlessly and gloriously. For TikTok users, it’s shorthand for the app’s ability to surface humanity’s je ne sais quoi — the odd, specific decisions that make people interesting. And for anyone watching AI, it’s a clue to why Sora — OpenAI’s text-to-video social media app — won’t be a TikTok killer anytime soon. In a media landscape dominated by short-form video, a flood of AI-generated content feels inevitable. When announcing Sora 2, OpenAI CEO Sam Altman said creativity could soon see “a Cambrian explosion,” and a quick scroll through the app shows the scale of it. You can watch Audrey Hepburn recite lines from Pulp Fiction; see a hippopotamus break into a convenience store; or enjoy Shaquille O’Neal performing ballet on Shark Tank. Sora can conjure tutorials, travel vignettes and cinematic clips in seconds — capabilities that will reshape the kinds of videos that gain traction online and the trends that sweep platforms like TikTok. If you can’t understand why anyone would want to create or watch these videos, read the latest Soundbite newsletter, which relates the story of a poet from Mississippi “who liked to write lyrics but didn’t have the kind of voice that could go head-to-head with professional singers.” She created an AI performer to sing her lyrics instead. But whether AI-generated videos can anchor a platform feels like less of a given. For now, that’s partly a function of scale: TikTok reaches 1.5 billion monthly users, compared with roughly 800 million for ChatGPT; Sora’s footprint is far smaller still. But there’s also something to be said for the perceived value of time spent, and the social currency of making content out of life’s many frictions. Sora can replicate the recounting of a bad Tinder date to a front-facing camera, but it can’t generate the flicker of vulnerability that makes that recounting so interesting. The free will to conjure a video from words may only prove that, in the social feed, not all free will is created equal. — Kira Bindrim, Bloomberg Weekend | |
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| AI will replace analysts at venture capital firms. VCs are hoping AI can give them a leg up, from screening investments to creating AI copies of themselves. — Kate Clark, Bloomberg Tech Practical quantum computing is coming soon, according to researchers at Alphabet, who published a paper in Nature this week that they claim “clears a path for useful applications of quantum technology within five years.” — Isabella Ward, Bloomberg Tech (Meanwhile, Bloomberg Opinion’s Catherine Thorbecke writes that China is narrowing the gap with the US in quantum.) European defense tech is “a bubble and some investors are going to lose money,” according to Torsten Reil, co-chief executive officer of the German drone company Helsing. — Yazhou Sun, Christina Kyriasoglou, and Tom Mackenzie, Bloomberg News Disaster spending will be an ever-greater share of the economy: “The US economy has grown by $20 trillion since 2000, to $29 trillion last year. About $7.7 trillion of that — or 36% of all the growth in GDP — is spending related to recovering from or preparing for disasters,” according to Bloomberg Intelligence. — Eric Roston, Bloomberg Green “The Mag 7 are done as an AI benchmark.” “AI hyperscalers will see their share of AI-driven gains shrinking” as other companies get in on the tech. — Edward Harrison, The Everything Risk America’s experiment with ‘state capitalism’ is destined for failure. “Far from strengthening domestic industry, it will favor incumbents over startups, delay needed reforms and restructurings, and invariably prioritize politics over productivity.” — Bloomberg Opinion Editorial Board AI will make your band sound better: “For about $220, a company called Izotope will sell you a software package called Ozone that uses an AI-powered assistant to identify a song’s key characteristics and then suggests various tweaks depending on the genre of music it detects.” — Mark Gilbert, Bloomberg Opinion Sorry, but coffee will keep getting more expensive. Climate change is a bigger factor than tariffs, and a lot harder to undo. “Because of climate change, only about 50% of today’s coffee-growing regions will be suitable for coffee production by 2050, studies say.” — Renata Carlos Daou, Bloomberg Green | |
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| How Good Will Google’s Next AI Model Be? Alphabet reports earnings this week, but there’s another potential milestone for the company on the horizon that’s worth watching. Traders on Polymarket put a 76% chance on Google releasing the next version of its Gemini AI model by the end of November. Given how much of the company’s — and the entire stock market’s — success now hinges on the AI boom, that release would be a major check in on AI progress. Both Polymarket and Kalshi think Alphabet will likely end the year with the best AI model, at least by one commonly cited leaderboard. But even if that’s true, Gemini’s next release – like OpenAI’s underwhelming release of GPT-5 and Anthropic’s quieter release of Claude 4.5 – could raise questions about whether today’s AI can keep improving, or whether it’s running into the limits of scale. (Right now, these companies’ models are, broadly, neck and neck – with different ones topping different leaderboards.) For Alphabet, the big question is how Gemini compares to its rivals. But for the market’s broader AI frenzy, it’s whether the pace of AI progress is slowing down. (Forecasts as of 2 p.m. Friday Oct. 24.) Bonus Rapid-Fire Forecasts: (As of 1:45 p.m. on Friday, Oct. 24.) | |
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| Is the Oil Glut Here? Americans bogged down by rising costs were finally nearing a respite, as oil prices barreled toward lows not seen since the Covid-19 pandemic. That would mean cheaper prices at the pump, a central tenet of Trump’s economic agenda. With oversupply mounting and a Gaza peace deal easing risk to Middle Eastern supplies, oil’s slide looked unstoppable — until the White House slapped sanctions on Russia’s two largest oil producers, sending prices surging again. Two of the administration’s goals are now at odds: pressuring Russia and lowering prices for US consumers. So what’s next? While the threat of curtailed flows from Moscow, one of the world's largest producers, is a significant concern, many analysts and traders believe that they’ll be unlikely to outweigh the drag from oversupply. Since its invasion of Ukraine in 2022, Russia has been hit by numerous rounds of sanctions by Western countries and a price cap for the oil it sells, but the market has become adept at finding workarounds to keep that crude flowing. In the past, major buyers India and China have continued to scoop up barrels. This time there are signs of a slowdown, at least for now. If these flows remain intact and other top producers including Saudi Arabia and the US produce oil at their current pace, oil markets are poised to head lower. In addition, any indication that Russia may come to the negotiating table over ending the war in Ukraine could also send oil prices tumbling toward $50 a barrel. While the outlook is still uncertain, two things are clear in a low price environment: Depressed energy costs would be a welcome relief for American consumers who have been paying more for everything from groceries to electricity. On the other hand, sustained low oil prices will ramp up pressure on the economies of oil-reliant economies like Saudi Arabia and Russia and hurt the US shale industry. — Mia Gindis and Devika Krishna Kumar, Bloomberg News | |
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| Sunday: The ASEAN leaders summit begins in Kuala Lumpur, with Trump attending; Argentina holds midterm elections. Monday: The State Bank of Pakistan is likely to leave interest rates unchanged; Saudi Arabia’s flagship investment forum begins in Riyadh; Trump is expected to travel to Japan. Tuesday: The APEC CEO summit begins in South Korea; Chile’s central bank is expected to leave rates unchanged. Wednesday: Meta, Alphabet and Microsoft report earnings; the Fed and the Bank of Canada are both expected to make quarter-point rate cuts; the Netherlands holds a snap election. Thursday: Trump is expected to meet Xi Jinping on the sidelines of the APEC summit; the ECB is expected to keep rates unchanged; Apple, Amazon, Coinbase and Eli Lilly report earnings; the euro area reports GDP; the Bank of Japan will likely leave rates unchanged. Friday: Exxon and Chevron report earnings; the euro area reports CPI; Trump’s deadline for raising tariffs on Mexico. | |
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