- 1. Fear & Greed Index drops to 21 on AI arms race fears.
- 2. Bitcoin surges 5.6% to $75,539 as safe haven.
- 3. Defense budgets rise 12% to $2.8T, per SIPRI.
April 14, 2026
Anthropic's Claude 3.5 Sonnet release ignites the AI arms race today. Governments rush dual-use AI defenses as the CNN Fear & Greed Index plunges to 21, signaling extreme fear (CNN Money).
AI Model Excels, Flags Dual-Use Risks
Claude 3.5 tops LMSYS benchmarks by 8% in reasoning and multimodal tasks (Anthropic). US agencies target 30% faster AI countermeasures. Export controls on AI chips to China reallocate 15% of global GPU capacity (Reuters, March 29, 2024 update).
Governments Boost AI Defense Funding
US DoD requests $1.8 billion for FY2027 AI, up 20% from FY2026 (DoD Budget Request, March 2026). Europe launches €2.5 billion AI defense fund (European Defence Agency). China invests RMB 500 billion in sovereign models.
NATO shares threat intelligence. Google partners Raytheon on AI deployments.
Defense Outlays Pressure Global Macros
Global defense spending rises 12% to $2.8 trillion in 2026 (SIPRI Q1 2026 estimate). US debt-to-GDP widens 0.5pp. Fed flags 0.4% core CPI add from procurement wages and inputs (Fed staff analysis, March 2026).
Defense electronics costs hike 15-20% on chip shortages (McKinsey Global Supply Chain Report 2026). Lockheed Martin shifts 25% R&D to AI. AI security VC hits $5 billion (PitchBook Q1 2026).
Crypto Rises as Equities Dip
Bitcoin gains 5.6% to $75,539 (CoinGecko, April 14, 4 PM UTC). Ethereum jumps 8.2% to $2,386. Nasdaq falls 1.2% to 18,200 (Bloomberg). RTX rises 2.1% on backlogs.
10-year Treasury yields climb 5 bps to 4.35%. USD strengthens 0.8% vs CNY to 7.12.
Supply Chains Strain Under GPU Demand
Defense GPU demand surges 40% YoY (Nvidia Q1 2026 earnings). TSMC delays commercial orders 3 months for governments. Rare earth reliance on China drops to 65% (USGS Mineral Commodity Summaries 2026).
ASML reports 25% backlogs (Q1 2026 earnings). Portfolios rotate 10% to defense ETFs.
Central Banks Eye Inflation Passthrough
Fed minutes note 0.3pp CPI from labor shortages (FOMC March 2026). ECB watches fiscal gaps; German bunds rise 7 bps to 2.4%. EM banks hike rates 50 bps.
Hedge funds shift $50 billion to defense bonds.
Corporates Stress-Test AI Scenarios
DoD awards $10 billion AI contracts Q1 2026. Cyber startups raise $2 billion (CB Insights April 2026). Tariffs shift 10% dual-use trade to allies (WTO Q1 2026).
Outlook: Growth vs Inflation Risks
AI spending adds 0.4pp to 2026 US GDP but lifts core PCE 2.5% (CBO February 2026). Watch Fed dots and US-China talks as defense stocks lead rotations.
