AI Spending Surge, Deutsche Bank's Record Year, More

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What is the main topic discussed in this episode?

Unknown 0:00
The UK stands apart as a place to do business, not because of one advantage, but many working together. Over £10 trillion in capital, four of the world's top universities, a 10-year industrial strategy in action, its stability with dynamism, global reach with local depth. It all adds up to greater growth. Find out more at business.gov.uk slash growth.
Caroline Hepker 0:28
News when you want it with Bloomberg News Now. I'm Caroline Hepker.
Stephen Carroll 0:32
And I'm Stephen Carroll.
Caroline Hepker 0:33
The world's largest tech firms are showing no sign of easing up on AI spending as earnings reveal plans worth hundreds of billions of dollars. Meta alone has ambitions to spend as much as $135 billion this year as Microsoft, Samsung and Tesla also ratchet up capital expenditure. Now, Meta's CEO Mark Zuckerberg says that the cash is needed to front load computing capacity, And the company is already seeing a payoff in the way that AI is being used internally.
Mark Zuckerberg 1:05
I think that 2026 is going to be the year that AI starts to dramatically change the way that we work. As we navigate this, our North Star is building the best place for individuals to make a massive impact. So to do this, we're investing in AI-native tooling so individuals at Meta can get more done. We're elevating individual contributors and flattening teams. We're starting to see projects that used to require big teams now be accomplished by a single, very talented person.
Caroline Hepker 1:34
Mark Zuckerberg speaking there as Meta's earnings call saw also him discuss the firm's better than expected sales outlook, which helped to ease market concerns over record spending. Meta's shares jumped almost 7% in after hours trading.
Stephen Carroll 1:52
Well, despite that gain in Meta's shares post-market, doubts are persisting among some investors that firms can recoup their massive AI outlay. Shares in Microsoft dropped in after-hours trading as the software giant announced a 66% increase in capital expenditure for the second quarter. The higher than expected spend of over $37 billion came in as the firm also announced a slowdown in cloud services growth. But Microsoft CEO Satya Nadella says he expects AI expenditure to deliver for the firm.
Satya Nadella 2:23
We are in the beginning phases of AI diffusion and its broad GDP impact. Our TAM will grow substantially across every layer of the tech stack as this diffusion accelerates and spreads. In fact, even in these early innings, we have built an AI business that is larger than some of our biggest franchises that took decades to build.
Stephen Carroll 2:46
Satya Nadella was speaking as Microsoft's total sales increased by 17% to $81 billion during the quarter. Meanwhile, the information is reporting that Microsoft, NVIDIA and Amazon are in discussions to invest as much as $60 billion in OpenAI as part of a major new funding round. This as analysts are increasingly warning of a potential AI bubble forming in part because of the circular nature of some investments.
Caroline Hepker 3:12
Gold has surged to a new record above $5,500 an ounce as a lack of liquidity helped to accelerate a nine-day rally. The price of bullion has once again soared this week, fuelled by a weaker dollar and investor flight from sovereign bonds and currencies. The move higher came as traders looked beyond the Federal Reserve's rate decision to hold interest rates on Wednesday. BlackRock's Rick Ryder, vocal proponent of more aggressive rate cuts in the US, has emerged as a leading contender to succeed Jerome Powell as Fed chair later this year.

What are the latest trends in AI spending by major tech firms?

Caroline Hepker 3:47
That speculation has fuelled growing bets on a dovish policy shift, helping propel a record-breaking rally across commodities with gold, copper and silver all together. hitting new highs.
Stephen Carroll 4:00
Deutsche Bank has announced a €1 billion share buyback as it reported pre-tax profits of just over €2 billion for the fourth quarter. However, the results were overshadowed after the lenders' offices in Frankfurt and Berlin were raided by German authorities yesterday. The move was part of a money laundering probe looking at past dealings by staff with firms linked to Roman Abramovich. Here's what the chief financial officer of Deutsche Bank, James von Moltke, told Bloomberg about the investigation.

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