The Bloodbath In Crypto

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Welcome to the TechBoo Ride Home for Tuesday, November 18th, 2025. I'm Brian McCullough. Today, what happened with Cloudflare this morning? Grok's new model wants to be creative, catching you up on the bloodbath in crypto if you were unaware. Databricks is 12 years old, but it seems to be one of the big AI winners so far, and debt continues to pile into the AI build-out. Here's what you missed today in the world of tech.

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As ever, I hope this is resolved by the time you hear this, but in case you want to know what was happening this morning... Cloudflare at the time of this writing says, the issue has been identified and a fix is being implemented hours after a major outage impacted X, ChatGPT, and others starting at 1148 UTC. Quoting The Verge. Many sites displayed an error message saying, please unblock challenges.cloudflare.com to proceed.

on Cloudflare's status page. The most recent update from the company at 9.34 a.m. Eastern Time says, we've deployed a change which has restored dashboard services. We are still working to remediate broad application services impact. In a statement to The Verge, Cloudflare spokesperson Jackie Dutton says the company noticed a spike in unusual traffic to one of its services starting at 6.20 a.m. Eastern Time, causing some traffic passing through Cloudflare's network to experience errors.

Dutton adds, we do not yet know the cause of the spike in unusual traffic. We are all hands on deck to make sure the traffic is served without errors. The company is also planning to investigate the cause of the unusual spike in traffic. Other online services including Indeed, Grindr, Uber, Canva. Spotify, New Jersey Transit, League of Legends, an archive of our own experienced issues during the outage, while digital outlets like Axios, The Information, and Politico also went down.

The Cloudflare outage comes less than a month after a huge Amazon Web Services crash took down Fortnite, Alexa, Snapchat, and other services, which was followed by issues at Microsoft Azure that brought Xbox offline for hours, end quote.

XAI has unveiled Grok 4.1, saying its hallucination rate is three times less compared to its previous models. Also, Grok 4.1 Thinking, which apparently holds the top spot on LM Arena's... text arena. Quoting Tom's guide, the new launch announced on XAI yesterday signals a shift in attitude aiming to turn Grok from a rebellious wildcard into a more reliable, user-friendly companion.

This isn't just a routine update either. It's a major move that seeks to redefine how Grok interacts with people, making it, quote, exceptionally capable in creative, emotional, and collaborative interactions. Grok 4.1 uses smarter learning methods to deliver smoother, more natural conversations, prioritizing emotional intelligence, and more engaging dialogue.

Behind the scenes, Grok 4.1 carried out a silent rollout between November 1st and 14th, allowing XAI to record user feedback. In blind tests, users picked Grok 4.1 over Grok 4.0. about 65% of the time, indicating a marked difference. XAI claims that Grok 4.1 leads in emotional intelligence, now holding the top spot on the EQBench 3 test, emotional intelligence benchmark for AI models.

According to the announcement, this means Grok 4.1 is best at understanding human emotions and responding with empathy, making conversations more comfortable and supportive. When it comes to creativity, Grok 4.1 also, quote, excels in creative writing, V3, ranking among leading models for creative responses. These results show that Grok 4.1 not only delivers accurate and relevant information, but also stands out in imaginative

text generation, offering thoughtful, engaging replies, whether the conversation is sensitive or creative in nature. XAI also claims that this update brings noticeable changes to Grok's thinking abilities, capable of handling more complicated tasks with greater efficiency. When tested on its versatility, cultural context, and linguistic precision, Grok scored number one on the LLM Arena test, suggesting that this could quickly become the go-to platform for creative writing.

Most importantly, this update sees XAI try to follow in the footsteps of two of its biggest competitors, Anthropic with Claude and OpenAI with ChatGPT. Both companies have recently seen huge improvements in their personalities, offering more human interactions. According to XAI, this is a big part of the change that has been put in place with Grok 4.1.

AI companies seem to be moving to a more personable version of the AI chatbot experience. For some, that will feel great, making interactions feel more emotional. For others, it might start to feel a bit fake or...

If you're into crypto, you're definitely aware of this. But if you're only crypto adjacent, you should know that the total market value of more than 18,000 crypto coins, basically the entire crypto ecosystem. is down 25% in value since October 6th, thereby wiping out around $1.2 trillion in wealth. Bitcoin has fallen 28% to around $89,500, its lowest level since April, quoting the FT.

Losses for traders in high-octane leveraged bets over the past month have accelerated the pace of the selling, analysts say. The sell-off is also being seen in equity markets. Despite all the institutional adoption and positive regulatory momentum, crypto market gains have now been wiped out on the year, said Brett Knobloch, a crypto analyst at Cantor Fitzgerald.

Fresh doubts about whether the Federal Reserve will lower interest rates when it meets in December have in recent weeks added to worries about the sky-high valuations attached to the Silicon Valley tech companies at the forefront of the artificial intelligence investment boom. Lower interest rates polish the allure of crypto tokens and other risky assets because they reduce how much investors can earn from holding short-term U.S. government debt.

Falling odds of a December cut by the Fed, which has lowered rates by half a percentage point so far this year, have also weighed on stocks, dragging the benchmark S&P 500 index down about 3.5% from a record-closing high hit in October 28.

But it was President Trump who precipitated the worst day of the recent market wobble. On October 10th, the president's threat to impose, quote, massive tariffs on China triggered the liquidation of... $20 billion in leveraged crypto positions, the largest single-day decline on record across exchanges monitored by trading platform Coinbase.

Crypto investors love leverage, said Ryan Rasmussen, head of research at Bitwise Asset Management. What we see time and time again is that traders get out over their skis. They think this time is different, end quote. The size and speed of the declines across the crypto market on October 10th have left a lasting mark. Investors who had borrowed money to boost their returns, leaving them particularly exposed when prices fell, now solemnly refer to the sell-off as 10-10.

What we are seeing now is not a collapse in crypto markets. It is the extended aftershock of October's liquidation event. said David Namdar, chief executive of CEA Industries, a vaping company that earlier this year began buying vast quantities of a token issued by Binance, the world's largest crypto exchange. The scale of the sell-off is different this time because positions are larger, leverage ran deeper, and the unwind takes longer, Namdar added. The fundamentals have not changed, end quote.

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Yeah, everybody these days seems to think that all of the markets are correlated, so concerns about, say, a possible AI bubble can have an effect on crypto markets and stock markets, etc. So maybe this is all related. In a new Sundar Pichai interview, he says that the AI boom has some irrationality, tax investment cycles can overshoot, and no company is going to be immune to the bubble bursting, quoting the BBC.

Speaking exclusively to BBC News, Sundar Pichai said, while the growth of artificial intelligence investment has been an extraordinary moment, there was, quote, some irrationality in the current AI boom. Asks whether Google would be immune to the impact of the AI bubble bursting. Mr. Pichai said the tech giant could weather that potential storm, but issued a warning. I think no company is going to be immune, including us, he said.

In comments echoing those made by U.S. Federal Reserve Chairman Alan Greenspan in 1996 warning of irrational exuberance in the market well ahead of the dot-com crash, Mr. Pichai said the industry can overshoot in investment cycles like this.

We can look back at the internet right now. There was clearly a lot of excess investment, but none of us would question whether the internet was profound, he said. I expect AI to be the same, so I think it's both rational and there are elements of irrationality through a... like this. AI will also affect work as we know it, Mr. Pichai said, calling it the most profound technology humankind has worked on.

We will have to work through societal disruptions, he said, adding that it would also create new opportunities. It will evolve and transition certain jobs and people will need to adapt, he said. Those who do adapt to AI will, quote, do better. End quote. End quote. End quote. End quote.

And debt continues to enter the AI bubble chat. Amazon has raised $15 billion in its first U.S. dollar bond offering in three years. Sources say the proceeds will be used for acquisitions, CapEx, share buybacks, and more, quoting Bloomberg.

The proceeds of the deal topped initial estimates by $3 billion. At its peak, the bond attracted about $80 billion in demand before orders were cut in half as borrowing costs... fell during the sale process, said the people who asked not to be identified discussing private details.

Monday's sale comes after Google parent Alphabet earlier this month sold $25 billion of debt in the US and Europe. Meta Platforms issued $30 billion of corporate bonds last month, the biggest such offering of the year, while Oracle raised $18 billion through high-grade notes in September. The issuance spree from the tech companies has helped push global issuance to a record of more than $6 trillion this year.

JPMorgan Chase and company expects the fresh wave of spending to finance investments in artificial intelligence to drive issuance in the U.S. high-grade grade market to a record $1.81 trillion next year. Amazon sold investment-grade notes in six parts, the people said, pricing on the longest portion of the deal, a 40-year bond, tightened to 0.85 percentage points above Treasuries from 1.15 percentage point initially, the people added.

Amazon's capital expenditures are expected to top $147 billion next year, roughly three times the level seen as recently as 2023, according to the average of analysts' estimates compiled by Bloomberg. A, quote, opportune time for Amazon, which has so far relied primarily on its own cash flow to fund investments to incorporate debt into its capital structure to expand funding flexibility, JP Morgan wrote in a note last week. Amazon could also look to private credit markets.

To structure financing around its extensive data center footprint, J.P. Morgan added, citing the potential for sale, leaseback, or joint venture-style vehicles. The power capacity of Amazon's data center fleet has doubled since 2022, and Chief Executive Officer Andy Jassy has said he expects it to double again by 2027. Earlier this month, the company's cloud unit signed a $38 billion deal to supply open AI.

access to hundreds of thousands of NVIDIA graphics processing units as part of a seven-year computing deal. Amazon last tapped the U.S. high-grade market in November 2022 when it raised $8.25 billion.

Sources say Databricks is in talks to raise funds at a more than $130 billion valuation, up about 30% from September when it raised a $1 billion Series K at a $100 billion valuation. Quoting the information, the possible capital raise reflects investor interest in companies providing cloud software to AI developers and which are generating cash. Databricks hasn't signed a term sheet with any investment firm yet, one of the people said.

The 12-year-old company this year has been touting products that let customers use AI models to query and analyze their data and to build AI agents that automate white-collar tasks. The company, which has raised more than $15 billion, could use the money to do acquisitions and hire researchers and keep pace with Snowflake, a rival database provider that sports an $86 billion market capitalization.

Around the time Databricks said it had raised $1 billion in funding at a valuation of more than $100 billion, Snowflake CEO Sridhar Ramaswamy dismissed valuation comparisons with Databricks. He told his colleagues in an email that private valuations, quote, closed doors, often with terms that inflate the headline number.

At the time, Databricks said its AI business recently passed $1 billion in annualized sales and was generating $4 billion in annualized sales overall in its July quarter, up 50% year over year, and had become... free cash flow positive over the prior 12 months. Snowflake has roughly similar revenue, generating $1.1 billion in the July quarter, up 31% year over year. But unlike Databricks, Snowflake also generates substantial cash from its operations.

Databricks' business has been buoyed in part by OpenAI, a longtime customer. Databricks has been a longtime candidate for an initial public offering, although CEO Ali Goetze has said he enjoys running the firm privately. has regularly held employee share sales and has allowed its outside investors to sell some shares. It is nearing 10,000 employees."

Finally today, a follow-up to something we've been tracking. Roblox is just throwing in the towel on the age thing. Well, at least short of banning younger users entirely. Roblox plans to require all users to undergo an age estimation process to access chat features starting in January of 2026, quoting The Verge.

Roblox has come under significant scrutiny over child safety on the platform with multiple states filing lawsuits this year against the company. The plan to require age estimation for chats is just one of several safety-related announcements the company has made in recent months. Beginning in the first week of December, Roblox will require users in some markets including Australia, the Netherlands, and New Zealand to go through the age estimation process to be able to chat with others.

In early January, the requirement will expand to other countries where you're able to use Roblox's chat. After going through the age estimation process, Roblox will assign users into groups like under 9, 9-12, 13-15, 16-17, 18-20, and 21+. Users will only be able to talk to users in their same group and similar age groups as appropriate, Roblox VP Rajiv Bhatia said in a briefing in its newsroom post.

Roblox gives a couple examples of how these groups work and who they let people chat with. For example... Elisa, estimated age 12. Elisa has access to chat with users age 15 or younger in experience chat. All users 16 or older are prevented from initiating or engaging in chat with her. Marcus, estimated age 18. Marcus has access to chat with users aged 16 or older and could add a younger sibling as a trusted connection as long as they are 13 or older.

The images and video used for Roblox's age verification checks are processed by Persona, and Roblox says the images and video are deleted immediately after they are processed, end quote. Nothing more for you today. Talk to you tomorrow.