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[00:00:02] Now on BBC News, the latest
[00:00:04] business news from across the globe.
[00:00:06] globe. Business Today. MUSIC
[00:00:16] MUSIC Feeling Feeling the heat supermarkets across
[00:00:18] across Europe report more cyber attacks
[00:00:22] attacks on their freezers. Investors Investors withdraw billions of dollars
[00:00:25] dollars from crypto exchange platform platform Binance after it reported
[00:00:28] reported it was hacked last week.
[00:00:30] week. And on the eve of the US midterm
[00:00:34] midterm elections, despite a strong strong economy, voters are increasingly
[00:00:38] increasingly frustrated at the impact
[00:00:39] impact of rising inflation. Hello.
[00:00:42] Hello. Welcome. This is Business Business Today I'm Ben Thompson and
[00:00:45] and we're going to start in Europe
[00:00:47] Europe where the EU has said it is is deeply concerned after dozens
[00:00:51] dozens of supermarkets across seven seven different countries have been
[00:00:54] been hit by suspected cyber attack, attack, it remotely raised temperatures
[00:00:58] temperatures in fridges and freezers. freezers. Around 40 stores were affected
[00:01:02] affected in Belgium and Luxembourg, Luxembourg, where local media say
[00:01:05] say millions of euros of food has has been thrown away. The Danish
[00:01:09] Danish firm Danfoss, which makes makes components for refrigeration
[00:01:12] refrigeration units, says its products products were involved in the attack.
[00:01:15] attack. Well, the company was also also targeted in a previous attack.
[00:01:18] attack. It took out fridges in hundreds hundreds of supermarkets in France
[00:01:22] France last month. Let's talk to
[00:01:24] to Cynthia Kaiser, who's former FBI
[00:01:26] FBI cyber director and deputy director, director, I should say, and now senior
[00:01:30] senior Vice President at the Ransomware Ransomware Research Centre at Halcyon.
[00:01:33] Halcyon. Good to have you on the the programme. And look, I mean,
[00:01:35] mean, what do we know about how this this happened? It is not the first
[00:01:38] first time one assumes it will not
[00:01:40] not be the last, but this is a significant
[00:01:43] significant breach, isn't it? This
[00:01:45] This is a significant breach. It's It's unfortunately not a technically
[00:01:49] technically difficult one to accomplish. accomplish. Up until this point,
[00:01:52] point, we've really lacked the political
[00:01:55] political or other will among threat threat actors to conduct these types
[00:01:58] types of attacks because it was bringing
[00:02:01] bringing the cyber into the physical physical threat world. But now what
[00:02:05] what we see threat actors doing is is they're going in through the internet
[00:02:08] internet and it makes sense. They, They, you know, want you want to
[00:02:11] to be able to remotely control some
[00:02:15] some processes of various elements elements in your supermarkets, but
[00:02:18] but they can go in, take over the
[00:02:21] the controls, manipulate those controls,
[00:02:23] controls, temperatures, defrost cycles,
[00:02:26] cycles, alarms, and then ultimately ultimately cause these damages without
[00:02:30] without ever having to drop a malicious
[00:02:31] malicious tool or bad software. We We saw in the first attacks that
[00:02:35] that took place in France, it was
[00:02:37] was a similar cyber attack that was was because of outdated software.
[00:02:41] software. They said it was fridge
[00:02:43] fridge fridge units that weren't weren't being supported by new updates
[00:02:47] updates and security patches, that that sort of thing. Is it likely
[00:02:50] likely that this is the same sort
[00:02:52] sort of occurrence. Outdated security
[00:02:56] security vulnerabilities that are are sitting there exposed and haven't
[00:02:59] haven't been patched are the main main way that we see adversaries
[00:03:02] adversaries really looking to get get into our operational technology,
[00:03:05] technology, that technology that that controls everything, not just
[00:03:08] just the data. So we're seeing a
[00:03:11] a large quantity right now of vulnerabilities vulnerabilities being discovered.
[00:03:14] discovered. It's hard to patch those those across operational technology,
[00:03:17] technology, but this has been a problem
[00:03:19] problem for years. Many of the vulnerabilities
[00:03:22] vulnerabilities we see in operational operational technology have actually
[00:03:25] actually existed for years and years,
[00:03:27] years, and it's been hard for operators
[00:03:31] operators to really understand how how to implement those fixes in a
[00:03:34] a way that doesn't affect their operations. operations. I mean, what's so interesting
[00:03:37] interesting here is I mean, it's it's quite aside from the question
[00:03:40] question of why you would need all all of these things to be connected connected to the internet anyway,
[00:03:44] anyway, surely a fridge just is a
[00:03:45] a fridge. But you know, a why these
[00:03:48] these things can also heat. I guess guess that's a sort of question for
[00:03:52] for the manufacturers. A fridge surely surely just chills and not heats
[00:03:54] heats things, but at the same time, time, what the motivation of the
[00:03:58] the cyber attackers may be? Why would would you want to do this? Is it
[00:04:01] it just sending a warning shot across
[00:04:03] across the bows? It's difficult to
[00:04:06] to determine motivation until you you have attribution, but a few different
[00:04:10] different examples of why cyber actors actors may be conducting these kind
[00:04:13] kind of attacks is to try to sow
[00:04:16] sow societal chaos. It's very similar
[00:04:19] similar to the Iranian attacks against against water infrastructure that
[00:04:21] that we saw in the United States
[00:04:23] States over the summer. Why target target these water facilities and
[00:04:27] and why do so in a way that's really really obviously caught? Well, it's
[00:04:31] it's to make people understand that
[00:04:34] that there are consequences, that that there are, you know, potential
[00:04:37] potential harms that can come from from these operations. And it's to
[00:04:39] to make them afraid. And so when when you really think towards, all
[00:04:42] all right, it's trying to make them
[00:04:44] them afraid. It's actors who have
[00:04:48] have a political motivation to try
[00:04:50] try to sow that chaos. That could could include Russia. It could include
[00:04:54] include Russian hacktivists as the the activists using cyber matters
[00:04:58] matters include Iran. But overall
[00:05:00] overall it means that you have threat threat actors trying to send messages,
[00:05:04] messages, trying to scare people people using technical means. Cynthia,
[00:05:07] Cynthia, really good to talk to you. you. Thanks for your insight into
[00:05:10] into this right now. Cynthia Kaser Kaser there, who's the FBI cyber
[00:05:13] cyber deputy director and now senior senior Vice President at the Ransom
[00:05:16] Ransom Research Centre at Halcyon. Halcyon. Thank you, thank you. We're
[00:05:19] We're going to stay with cyber security. security. And there are fears of
[00:05:22] of what may become a bank run on
[00:05:24] on the crypto exchange Binance. Now Now the platform suffered the biggest
[00:05:28] biggest crypto hack last week when
[00:05:29] when hackers stole around $6 billion
[00:05:32] billion after initially halting withdrawals, withdrawals, Binance allowed customers customers to withdraw their digital
[00:05:36] digital assets for just a few hours.
[00:05:38] hours. On Sunday, the company admitted admitted billions of dollars were
[00:05:41] were taken out by customers, but but the scale of that is still becoming
[00:05:45] becoming clear. So let's show you you the numbers we have so far. Binance
[00:05:47] Binance says it suffered a net outflow
[00:05:51] outflow of $3.6 billion on Sunday Sunday alone, according to the Financial
[00:05:54] Financial Times. That figure is now now higher $5 billion. Either way,
[00:05:58] way, it's still a fraction of the the total funds that's held by the
[00:06:01] the platform, which it claims is
[00:06:04] is $171 billion. Binance has, of of course, pledged to cover any investor
[00:06:08] investor losses, but just how much much long-term damage has been done
[00:06:11] done to the platform and cryptocurrency cryptocurrency in general by the
[00:06:15] the security breach. It's a question question I put to Katharine Wooller, Wooller, who's a banking and financial
[00:06:19] financial services strategist at at the IT company Softcat. Look,
[00:06:22] Look, it's a big problem. Binance Binance is the world's largest crypto
[00:06:26] crypto exchange. So a place where where private individuals or businesses
[00:06:30] businesses or institutions can buy buy and sell crypto and a range of
[00:06:33] of other activities such as sending sending crypto and earning interest
[00:06:35] interest by market share. Binance Binance is the largest organisation
[00:06:38] organisation in the world of its its type by a significant margin.
[00:06:41] margin. That's in terms of the assets assets it's holding and also those
[00:06:44] those daily traded volumes. And of of course it is the largest hack
[00:06:47] hack in history. It's roughly four four times the size of the largest
[00:06:50] largest previous hack, which was was an exchange called Bybit in February
[00:06:54] February last year. So you know, know, Reputationally it is big, but
[00:06:58] but in terms of sort of relative relative size, what was stolen in
[00:07:01] in the hack is a relatively small
[00:07:03] small proportion of what a huge asset
[00:07:05] asset class for over 2 trillion USD. USD. That's all the crypto in the
[00:07:09] the world together. So it's if you you phrase it another way, it's about
[00:07:12] about £1 worth of crypto for every
[00:07:16] every £400 worth in the world. So So bad news sort of reputationally
[00:07:20] reputationally bad news if you hold
[00:07:21] hold crypto. There was a $100 billion
[00:07:24] billion sell off as a result, but
[00:07:27] but equally, you know, the crypto
[00:07:29] crypto industry as a whole has a
[00:07:31] a number of other historical occasions occasions where bad news has come
[00:07:34] come out, whether it was the FTX FTX exchange collapsing or sort of
[00:07:37] of bad news related to regulation, regulation, and often that bad news
[00:07:41] news can be shrugged off. And some
[00:07:43] some of what's been lost in terms terms of value I'd expect to see
[00:07:47] see come back. Katharine Wooller Wooller speaking to me a little earlier
[00:07:50] earlier now, tech stocks have been been recovering after massive sell
[00:07:52] sell offs last week on concerns of
[00:07:54] of a huge AI spending. Meanwhile, Meanwhile, anthropic that is the
[00:07:58] the maker of the popular AI chatbot
[00:08:00] chatbot Claude has amended its IPO IPO filing ahead of its blockbuster
[00:08:04] blockbuster listing, showing that that third quarter losses fell sharply.
[00:08:06] sharply. But revenues increased. increased. Let's talk to Michelle,
[00:08:09] Michelle, who's standing by in New New York for us. Michelle, that's that's the point here, isn't it,
[00:08:13] it, that all of the big AI firms
[00:08:14] firms are desperate to prove that
[00:08:17] that they can make money? Yeah, I
[00:08:20] I mean, going through it. What is is it, third quarter revenue of 17
[00:08:24] 17 billion. They're talking about
[00:08:26] about a 12 fold increase in revenue, revenue, which sounds impressive
[00:08:29] impressive on the face of it. You You know, huge growth at the company
[00:08:32] company is seeing and the use of
[00:08:34] of its chat bots, especially amongst
[00:08:37] amongst businesses. That is the sort sort of silver lining. But the downside
[00:08:40] downside is they're talking about about a loss of 23 billion for that
[00:08:43] that same period. And the other number
[00:08:46] number that's drawing people's attention
[00:08:49] attention is this commitment of $895
[00:08:53] $895 billion. That is basically what what it is committing to spending
[00:08:56] spending on compute, on infrastructure. infrastructure. And I think that's
[00:09:00] that's the part that has Wall Street
[00:09:02] Street worried. Are these bets to
[00:09:04] to sort of build out the technology technology ever going to pay and
[00:09:08] and to what anthropic is trying to to do in this filing is show look,
[00:09:12] look, we are seeing this massive massive growth. We expect it to continue.
[00:09:16] continue. The question, I guess, guess, is will investors buy it when
[00:09:19] when it makes its highly anticipated anticipated stock market debut soon?
[00:09:21] soon? Yes. And the other question question is how patient those investors
[00:09:24] investors are willing to be that that they are looking at all these
[00:09:27] these big tech firms pumping billions
[00:09:29] billions of dollars into that new new technology, into the infrastructure,
[00:09:32] infrastructure, into the data centres, centres, into the chips and the pipes
[00:09:35] pipes and the cables. But that big big question is when they'll see see a payday. When do they start
[00:09:39] start to get a bit of cash back and
[00:09:41] and a return on that investment?
[00:09:44] investment? And I think I mean, just just judging by what we've seen over over the last week or so, what was
[00:09:48] was it? Alphabet, the parent company company of Google seeing, you know,
[00:09:51] know, half $1 trillion wiped off off its value in a day because investors
[00:09:55] investors got jitters about what what they saw in the numbers. You
[00:09:59] You know, I think Wall Street is is getting itchy feet. They're getting getting impatient and they're sort
[00:10:02] sort of getting to that phase of of show me the money where at the
[00:10:06] the same time you've got more of
[00:10:08] of these giant tech companies. They've They've kind of burned through the
[00:10:12] the cash they had on hand. They're They're now turning to financial financial markets to raise money,
[00:10:15] money, and I think they've been greeted greeted with a bit more scepticism.
[00:10:18] scepticism. And that's what's happening happening right now. Michelle good good to talk to you. Thank you. Keep
[00:10:22] Keep an eye on that for us. Michelle Michelle Fleury they're live in New
[00:10:25] New York. Well with just 24 hours hours left, the final campaign rallies
[00:10:29] rallies are being held in the United United States ahead of tomorrow's
[00:10:32] tomorrow's midterm elections. Now Now the stakes are high. Polls suggest
[00:10:36] suggest that the ruling Republican Republican Party could lose its majority
[00:10:38] majority in the House of Representatives Representatives and potentially even
[00:10:41] even the Senate. It's a result that that could make it harder for President
[00:10:44] President Trump to push through his his agenda during the final two years
[00:10:48] years of his term. And for investors, investors, the implications go well
[00:10:52] well beyond Washington. The outcome outcome could shape everything from
[00:10:54] from government spending and tax tax policy to energy markets and
[00:10:58] and the enormous investment pouring pouring into, as we've discussed,
[00:11:01] discussed, AI, artificial intelligence. intelligence. All of this as voters
[00:11:04] voters grapple with the rising cost cost of living with inflation driven
[00:11:07] driven by surging oil prices from from the war in Iran. Well, Terry
[00:11:10] Terry Haines is founder of Pangaea Pangaea Policy, that's a consultancy
[00:11:13] consultancy that advises Wall Street Street on US policy decisions. We
[00:11:17] We asked him how close attention
[00:11:19] attention markets are paying to those those elections. Yeah, I do think
[00:11:22] think they're focused on the entire
[00:11:24] entire gamut of this. But the market
[00:11:28] market implications of this are, are, I think, somewhat surprisingly
[00:11:32] surprisingly small even should Democrats
[00:11:35] Democrats eke out a majority in both
[00:11:37] both houses? The American system
[00:11:39] system is fundamentally different
[00:11:41] different from the UK system in that
[00:11:44] that the parliamentary party majority
[00:11:47] majority cannot automatically run
[00:11:50] run through an agenda and the President President will be there to veto it,
[00:11:53] it, number one. Number two, the major major things from foreign policy
[00:11:57] policy to AI spending and support
[00:11:58] support are things that frankly,
[00:12:01] frankly, are going to be beyond Congress.
[00:12:05] Congress. So the likelihood of fundamental fundamental change is very small.
[00:12:09] small. The Democrats are not going going to be able to roll back tax
[00:12:13] tax policy. President would veto veto that. And they're not going
[00:12:16] going to be able to meaningfully meaningfully change the behaviour
[00:12:20] behaviour of regulatory agencies, agencies, which now assume a great
[00:12:23] great deal of importance in completing completing the Trump agenda. Terry
[00:12:26] Terry Haines there. Now I just want want to show you these incredible incredible pictures. Dozens of robots
[00:12:30] robots taking part in an inaugural inaugural race at one of China's
[00:12:33] China's most famous mountains, around around 90 teams submitted humanoid
[00:12:37] humanoid and four legged robots, robots, some carrying items including
[00:12:41] including eggs and watermelons to to climb thousands of steps up Mount
[00:12:44] Mount Tai. Now the trial proved too too much for some of them. One collapsed
[00:12:47] collapsed in a heap, another took took a tumble before engineers came
[00:12:51] came to its rescue. Organisers said said the terrain provided a natural
[00:12:54] natural extreme testing ground to
[00:12:56] to train robots for real world use.
[00:12:59] use. That's your Business Today.
[00:13:00] Today. See you soon.
[00:14:20] as we follow every twist of the Premier Premier League season here on BBC
[00:14:24] BBC News. MUSIC
[00:14:38] I was here at the very first
[00:14:41] protest the party had organised about
[00:14:43] about a month ago and this is so
[00:14:45] so much bigger. Been driving towards towards the site of this wildfire,
[00:14:49] wildfire, but we've just stopped stopped at. The side of the road road here because of what we saw
[00:14:53] saw out the window. This man has has been pulled out successfully.
[00:14:56] successfully. It's taken a mammoth mammoth mammoth rescue effort. This
[00:14:59] This morning. You get very. Little Little sense of the terrible scenes
[00:15:01] scenes that were witnessed here last
[00:15:03] last night. There when the story
[00:15:08] story breaks, BBC News. Welcome back back to BBC News. Let's get more
[00:15:12] more on the US midterm elections elections which are a day away. Let Let me show you the live pictures
[00:15:16] pictures first of all from Washington Washington Capitol Hill tomorrow,
[00:15:19] tomorrow, millions of voters across across the country will determine
[00:15:21] determine the balance of power in
[00:15:23] in Congress. Well, Ros explains just
[00:15:26] just why these midterm elections elections are so important. Let's
[00:15:29] Let's remind ourselves of what's. what's. At stake. The midterms. Are
[00:15:32] Are all about who controls the two two houses of Congress. The House
[00:15:36] House of Representatives and the the Senate. This matters because because it's the part of the US government
[00:15:40] government that makes laws for the the country as a whole on everything
[00:15:43] everything from immigration to taxes taxes to defence. And right now both
[00:15:47] both houses are controlled by the the Republicans, as you can see,
[00:15:50] see, which is very helpful to President President Trump. Now the House of
[00:15:53] of Representatives is where proposed proposed laws are introduced and
[00:15:56] and debated. Each state gets a number number of seats proportionate