AI Capex Concerns Persist, Bitcoin Rebounds on Dip Buying, More
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News when you want it with Bloomberg News Now. I'm Nathan Hager.
And I'm Karen Moscow.
Karen, we begin with big tech and the race for AI dominance. $650 billion. That's how much four of the biggest U.S. tech companies plan to spend on capital expenditure this year. Bloomberg has calculated the spending plan by Alphabet, MetaPlatforms, Microsoft and Amazon. would set a high watermark for capital spending by any single corporation in any one of the last 10 years. Shares in Amazon dropped after the company announced its latest earnings and plans to spend $200 billion this year on data centers, chips, and other equipment. Amazon CEO Andy Jassy says the money will predominantly go to the company's cloud unit, and most of the spending will be for AI workloads. And speaking on the earnings call, Jassy said it will be worth it.
When I look at what's happening, it's kind of unbelievable if you look at the demand of what you're seeing already with AI, but the lion's share of that demand is still yet to come in the middle of that barbell, and that will come over time.
And as Amazon shares, they're down 7.5% after Andy Jassy spoke with these spending set to weigh on profits. Poonam Goyal covers Amazon for Bloomberg Intelligence.
They need to invest, right? We know that Amazon has to continue to invest in cloud services. It needs to invest in... needs to be done here. I think the long run narrative here is still good. The underlying results were solid across both AWS and retail.
Bloomberg intelligence analyst Poonam Goyal notes that some of Amazon's capital expenditures will go toward its effort to compete with SpaceX's Starlink internet service by placing satellites in low Earth orbit.
And Karen, the AI disruption trade has the S&P 500 on track for its worst week since April, and the risk-off mood has extended to crypto as well. Let's get the market roundup from Bloomberg's John Tucker. John.
And Nate, it's not unlike the deep-seek sell-off of a year ago.
How much are major tech companies investing in AI?
Investors have been spooked by developments on a couple of fronts. The rollout of models from Anthropic that threaten to make software services redundant. alongside the uh eye-watering spending plans of the biggest tech companies you guys were talking about the tech heavy nasdaq composite index now down three percent year to date and the risk off mood extended to bitcoin the selling picked up steam this week in line with the unwinding of leveraged bets and the broader market turbulence nobel laureate paul krugman on bloomberg business week daily said he sees a possible crisis of faith in crypto and
I think it's a big wake-up for people that, you know, maybe this isn't actually going to be an enduring asset.
Sell-off briefly dragged Bitcoin to a more than 50% retreat from its October peak. Just yesterday, investors pulled $434 million from U.S. exchange-traded funds for Bitcoin. Now, this morning, it is higher, above $65,000 a token, and stock futures are modestly higher. I'm John Tucker, Bloomberg Radio.
All right, John, thank you. In geopolitical news, Iran and the U.S. held indirect talks today to reduce tensions that have threatened to spiral into war, with Tehran saying the meeting will be the first stage of a longer diplomatic process. In a statement on X, Oman's foreign ministry said about separately with the Iranian delegation led by Abbas Arachi and with the U.S. team that included Special Envoy Steve Witkoff and President Trump's son-in-law Jared Kushner. Talks began with Iran's Arachi presenting a preliminary plan for managing the current situation and advancing negotiations with the U.S. The state-run Islamic Republic news agency reported Iranian state TV said a second round of consultations was underway.
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