In a document sent to NATO and seen by Reuters, Moscow accused the alliance of a “dangerous and reckless course” that entailed “high risks of the outbreak of a direct armed conflict”

International News via Reuters:

Russia has warned NATO it would be ready to resort to nuclear weapons if the Western alliance attempted to cut off Kaliningrad, a Russian exclave that borders the Baltic Sea.

In a document sent to NATO and seen by Reuters, Moscow accused the alliance of a “dangerous and reckless course” that entailed “high risks of the outbreak of a direct armed conflict”.

The document said this included the possibility of “Russian strikes against decision-making centers in the alliance’s member states right from the outset”.

“Russia will be ready to use the entire arsenal of forces and capabilities at its disposal, including nuclear weapons, in order to defend its territory should NATO countries undertake any attempt aimed at isolating the Kaliningrad Region from the rest of the country,” the diplomatic note said.

The warning highlighted Moscow’s urgent concern at what it sees as a growing NATO threat to Kaliningrad, a heavily militarised Russian territory that is wedged between Poland and Lithuania and is slightly bigger than the US state of Connecticut.

In a written response, seen by Reuters, NATO said it was a defensive alliance committed to countering threats to its members from all directions.

“None of NATO’s exercises or activities pose a threat to the territory of the Russian Federation,” it said.

“We call upon the Russian Federation to end its unprovoked full-scale invasion of Ukraine. We urge the Russian Federation to refrain from increasingly reckless behaviour towards the Allies and to cease its irresponsible nuclear rhetoric.”

RISK OF MISCALCULATION

Nikolai Sokov, a Vienna-based nuclear analyst and former Russian diplomat, said it was becoming increasingly hard for Western countries to keep stepping up their support for Ukraine without tipping into direct confrontation with Moscow.

He said the Russian warning may indicate that hardliners are gaining influence in a debate over how to respond to Western actions that include arms supplies to Kyiv, new sanctions on Moscow, interceptions of Russian ships, frequent military exercises and intelligence flights near Kaliningrad.

“They (Russia) expect more action, including a blockade of the Baltic Sea – just below the level of war in European calculation, but for them this will be open war. I see a risk of mutual miscalculation,” Sokov said.

In an online interview, he said Russia and Europe were on a collision course that required caution and calculation on both sides.

Instead of this, the Europeans were applying “full court pressure” and Russia was delivering a serious warning that this was highly risky, Sokov added.

EUROPE SAYS IT FACES ‘HYBRID WAR’, RUSSIA DENIES WAGING IT

In addition to the private warning, Russian embassies in at least three European countries have issued statements in the past three days accusing NATO of escalating tensions through military exercises and planning scenarios involving Kaliningrad.

Kremlin spokesman Dmitry Peskov described these as diplomatic reminders to “hotheads in Europe”.

Relations, already dire since Russia’s 2022 invasion of Ukraine, have sharply worsened this year, with European governments accusing Moscow of stepping up a “hybrid war” on the continent through acts including sabotage and arson.

Russia denies that, and rejects repeated statements by Western politicians that it is gearing up for a possible military attack on a NATO country.

A NATO diplomat said: “I would say that the Russian letter is only another Russian attempt to intimidate Europeans, and that the response by NATO is firm and responsible. (It) reaffirms that we will not be dissuaded from supporting Ukraine.”

A senior European defence official said: “(This is the) first time since (the) Cold War that Russia is threatening us like this. So this is serious.”

Reporting by Lili Bayer in Brussels and Mark Trevelyan in London, Additional reporting by Andrew Gray and Sabine Siebold, Editing by Timothy Heritage

France’s harmonized inflation rate was 3.4% year-on-year in September, up from 2.6% in August, while in Italy it jumped to 4.1% from August’s 3.2%, all above the ECB’s 2% target

International News via Reuters:

Inflation rose far quicker than expected in some of the euro zone’s biggest economies this month due to the energy-price shock of the Iran war, increasing pressure on the European Central Bank to raise interest rates again.

The ECB has lifted rates twice this year to prevent rapid price growth from getting embedded, and investors have sharply raised rate hike bets in the past few weeks as natural gas, petrol and diesel prices have all soared.

France’s harmonized inflation rate was 3.4% year-on-year in September, up from 2.6% in August, while in Italy it jumped to 4.1% from August’s 3.2%, all above the ECB’s 2% target, data showed on Wednesday. 

In Germany, inflation rose sharply in five key German states in September, suggesting Germany’s national inflation rate —which will be released later on Wednesday — could increase this month. 

In Spain, the inflation rate rose to 5.0% in September from 4.6% in August, data showed on Tuesday.   

Energy inflation appears to have surprised on the upside in all countries that have reported so far, and food inflation has also surprised on the upside, although much more modestly, said Mariana Monteiro from J.P. Morgan. 

The national data comes ahead of the euro zone inflation release on Friday. Inflation in the bloc is expected to come in at 3.6% in September, up from 3.2% in the previous month, according to economists polled by Reuters.

HIGHER THAN THE ECB EXPECTED       

The ECB had expected inflation to accelerate from 3.3% in the third quarter to 3.6% in the final three months of the year, but economists say the actual peak is likely to be closer to 4%, given sky-high energy costs. 

Markets therefore expect another four interest rate hikes over the next year, on top of two moves already made this past summer.

“With very few signs of a resolution of tensions in the Middle East on the horizon and winter approaching, a correction in energy prices is unlikely any time soon,” Rory Fennessy, senior European economist at Oxford Economics, said. 

Under its “adverse” scenario, the ECB sees inflation at 4.0% in both the fourth quarter of this year and the first three months of 2027, and economists say current energy prices are more closely aligned with this scenario than its baseline.

Furthermore, the dollar’s recent strength will exacerbate Europe’s inflation troubles, as key commodities are priced in dollars and the exchange-rate impact makes energy even more expensive in local currencies.

Because this year’s inflation surge has yet to generate dangerous second-round effects across the euro zone, a moderate policy response from the European Central Bank remains appropriate, ECB chief Christine Lagarde said on Monday.

Although core inflation has not yet moved up notably this year, the renewed spike in energy prices means core inflation could rise into early 2027, Fennessy warned.    

Reporting by Maria Martinez and Balazs Koranyi; Editing by Andrew Heavens

The dots agents aim to capitalize on growing demand for agents that can handle everyday work with little supervision

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OpenAI on Tuesday unveiled always-on agents called dots that chase user goals across apps on their own, deepening its push into the lucrative enterprise market and pitting it against Meta in the race to sell AI that can work autonomously. 

The dots agents aim to capitalize on growing demand for agents that can handle everyday work with little supervision.

Interest in such tools has surged since Meta’s Muse drew millions of downloads earlier this month and jolted shares of companies that investors believe could benefit or be disrupted by autonomous AI services. Instinct, the startup behind the eponymous agent, also quadrupled its valuation to $10 billion this week, a little over a month after its previous fundraise.

OpenAI launched dots at its annual developer day in San Francisco on Tuesday while also touting its growing business and consumer presence, a sign that the reception for the company’s Astra model has allowed it to make up ground in the AI race.  

It also comes a day after OpenAI shelved the release of a more powerful Astra model, saying it showed a high willingness to mislead users about its actions. The company is under scrutiny after its rogue AI agents hacked Hugging Face and an Australian government health website during internal testing.

Growing quickly is crucial for OpenAI’s plans to spend tens of billions of dollars on AI data centers and keep pace with rivals such as Anthropic and Meta. The company, which ignited the AI boom with ChatGPT in late 2022, is also preparing for an IPO that could value it at more than $1 trillion. Rival Anthropic could be worth $2 trillion when it goes public.  

MANAGING EVOLVING PROJECTS

“We believe (the agent) is going to feel like a whole new way to work with AI. This is the real deal version of AI that we’ve always imagined for ourselves,” CEO Sam Altman said at the event, which had around 2,500 in-person attendees.

OpenAI’s live demos to show off the new capabilities, however, hit snags as the agents repeatedly failed to deliver voice updates in response to requests. “We might have some voice difficulties at the moment. Which is pretty unfortunate,” Developer Experience chief Romain Huet said on stage after a command fell flat.

One OpenAI employee said on X that the glitches stemmed from rolling out all the updates at once, but that OpenAI remained committed to live demos.

Dots use OpenAI’s advanced GPT-6 Astra model and can manage projects as they evolve, such as updating a sales proposal when customer needs change, and building a working demo for review. Users can communicate with dots on Slack and Teams, and the agents can draw on OpenAI’s Codex and ChatGPT Work tools to research, analyze data, prepare documents and build software.

On Tuesday, OpenAI highlighted safeguards it has built into dots. It said users could set custom rules that dictate what dots can do and when the agents should seek permission, adding that sensitive tasks such as changing passwords and permanently deleting data require explicit user consent. 

The company also said dots run on their own cloud computers, and that it was rolling out private intelligence tools to check for safety risks without retaining business customers’ data.

Several tech executives, including Palantir CEO Alex Karp, have in recent months said that businesses need certainty that AI companies are not retaining their data, especially in regulated industries such as healthcare and finance. 

Reuters reported on Friday that OpenAI was still working to understand the full scope of its rogue agent activity, two months after the Hugging Face hack, with the latest example coming when the startup said its agents had leaked 53 images from ChatGPT users. 

OpenAI reiterated on Tuesday that it does not use business customers’ data to train its AI by default, and that personal-plan users could opt out of sharing conversations and dots work used for training.

Weekly users of Codex and ChatGPT Work have reached more than 35 million, up from about 5 million Codex users in June, the company said Tuesday, while consumer-focused ChatGPT now has over 1.2 billion weekly users.

The company is rolling out a range of new offerings including a shared workspace for business teams and AI called ChatGPT Space, the cheaper GPT-6.1 Sol model and a $500 Pro plan offering higher usage and faster performance. 

Reporting by Deepa Seetharaman and Aditya Soni in San Francisco; editing by Peter Henderson and Nick Zieminski

The debate at last week’s UN festival of diplomacy in New York highlighted mounting concern among leaders from Africa, Asia and Latin America around the increasingly powerful technology after several safety breaches

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Developing nations are demanding a greater role in shaping the rules governing artificial intelligence, warning that a technology poised to transform economies could instead deepen global inequalities if its development and regulation remain concentrated in wealthy countries.

The debate at last week’s UN festival of diplomacy in New York highlighted mounting concern among leaders from Africa, Asia and Latin America around the increasingly powerful technology after several safety breaches, and as top researchers have warned it could destroy humanity.

“Developing countries cannot be reduced to the role of mere users of technologies designed elsewhere, nor should be the mere recipients of standards and norms that they did not adequately participate in shaping,” said Foreign Minister Thérèse Kayikwamba Wagner of the Democratic Republic of the Congo.

“We must ensure that technological transformations of the 21st century do not reproduce the economic imbalances of previous decades,” Wagner said.

She made the remarks at a Security Council session dedicated to AI that featured top executives of leading labs, including Sam Altman from OpenAI and Dario Amodei from Anthropic, who urged governments to work together to manage the technology.

Underscoring the surge in interest in the subject, Foreign Minister Khalilur Rahman of Bangladesh, who chaired the UN debate this year, said that, “four years ago, AI was raised in this hall by only five delegations – this year, 128 delegations addressed it.”

‘A QUESTION OF GOVERNANCE’

“Many framed AI as a question of governance: Who designs it, who benefits? Who bears the risks, and who is accountable when harm occurs,” added the Bangladeshi foreign minister as he concluded the marathon of speeches at the UN.

AI could enable developing countries to gain a century’s ‌worth of development in a decade if they act quickly on power, connectivity and skills gaps, the World Bank said in a report last month.

The International Monetary Fund said in July that AI could boost Sub-Saharan Africa’s economy by about 4% over the next decade under the right circumstances.

UN Secretary-General Antonio Guterres compared debates around AI risks and climate change and said that developing nations should have an equal voice in both.

“The climate crisis went from distant warning to daily reality and artificial intelligence moved at a speed that has blindsided even those who created it,” he said.

“These are not separate crises. They are chapters of the same story, the story of power: Who has it. Who is denied it. How it is used. And how it is changing,” Guterres told the UN.

As with climate change, Guterres and Global South leaders urged a coordinated global action rather than isolated national responses to AI threats.

Their focus on regulation stood in sharp contrast with remarks by US President Donald Trump, who has dismissed AI risks as a “hoax” and “sick conspiracy” and told the UN that – like climate change – they were vastly overblown.

“The very same people who said we’ll all be dead in 12 years because of global warming – a name since reborn to climate change because the planet was cooling, not warming, and nobody was dead – these are the same people that are now saying that AI is going to kill us all,” Trump said.

Belize Prime Minister John Briceño said AI, if well governed, could widen access to knowledge and improve public services. But he also warned: “Poorly governed, it can deepen inequality, expose critical systems, displace workers and leave developing countries dependent on technologies and rules designed elsewhere.”

Reporting by Doyinsola Oladipo in New York; Editing by Antoni Slodkowski and Howard Goller