Big Tech's AI Spending Spree, Minnesota Latest, More
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The UK stands apart as a place to do business, not because of one advantage, but many working together. Over 10 trillion pounds 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.
News when you want it with Bloomberg News Now. I'm Nathan Hager.
And I'm Karen Moscow.
Karen, let's begin with the latest market reaction to big tech earnings. Shares of meta platforms are up more than 8%. The Facebook owner topped projections for holiday quarter revenue and gave a strong forecast for the current period. That's offsetting concerns about plans for unprecedented spending on artificial intelligence this year. Here's about a CEO, Mark Zuckerberg, on the earnings conference call.
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.
And Mark Zuckerberg says Meta plans to spend as much as $135 billion this year on AI.
Meanwhile, Nathan, at Microsoft, spending surged to a record high while cloud sales growth slowed. That has shares of Microsoft down almost 7% this morning. Capital expenditures for the fiscal second quarter hit $37.5 billion. That's up 66% from a year ago. And here's CEO Satya Nadella on the company conference call.
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.
And CEO Satya Nadella says total sales increased $17,000 to more than $81 billion in the quarter.
And shares of Tesla are, Karen, they are up 3%. The company reported earnings above analyst estimates. And in his call, Tesla CEO Elon Musk says the company is discontinuing the Model X and XS vehicles.
It's time to basically bring the Model S and X programs to an end with an honorable discharge because we're really moving into a future that is based on autonomy.
To that end, Elon Musk says Tesla plans to spend $20 billion this year streamlining its electric vehicle lineup and shifting resources toward robotics and AI.
We have more news this morning on the AI front. Nathan, the information reporting NVIDIA, Microsoft, and Amazon are in discussions to invest as much as $60 billion in OpenAI as part of a major new funding round. This could help alleviate investor concerns about OpenAI's cash burn.
What are the latest market reactions to big tech earnings?
Meanwhile, Karen, NVIDIA CEO Jensen Wang says his company is still waiting for orders from Chinese customers for its H200 chips. Wang spoke to reporters today in Taipei.
I'm hoping that also the Chinese government would allow NVIDIA to sell an H200. So they have to decide. And I'm looking forward to a favorable decision. I think that H200 is very good for America technology leadership. It's also very good for the Chinese market.
Nvidia CEO Jensen Wang. Chinese officials did recently tell the country's largest tech firms, including Alibaba, they can prepare orders for the chips. Suggests Beijing is close to formally approving imports of components that are essential to power artificial intelligence.
Nathan, big tech earnings continue this afternoon, and that's when Apple reports its latest quarterly results. We get a preview with Bloomberg's Tom Busby.
Apple is poised to deliver its biggest sales quarter ever, thanks in large part to expected blowout sales of its iPhone 17 lineup, especially for the higher-end models. But investors are still concerned about rising costs for components, especially memory chips.
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