Stratospheric Tech Spending, US-Iran Nuclear Talks, More

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What are the implications of $650 billion in US tech spending?

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.
Stephen Carroll 0:28
News when you want it with Bloomberg News Now. I'm Stephen Carroll.
Caroline Hepker 0:32
And I'm Caroline Hepker.
Stephen Carroll 0:33
$650 billion. That's how much four of the biggest US technology companies are planning to spend on capital expenditure this year. Bloomberg has calculated that the spending planned by Alphabet, Meta, Microsoft and Amazon would set a high watermark for capital spending by any single corporation in any one of the past 10 years.

How is Amazon's capital expenditure affecting its stock performance?

Stephen Carroll 0:56
Shares on Amazon dropped after the company yesterday announced its latest results and plans to spend $200 billion this year on data centres, chips and other equipment. CEO Andy Jassy said the money will predominantly go to the company's cloud unit and most of that spending would be for AI workloads. Speaking on the earnings call, he said it would be worth it.
Unknown 1:17
When I look at this, 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.
Stephen Carroll 1:33
Amazon shares fell 11% in after-hours trading after Andy Jassy spoke with the spending set to weigh on profits. Operating income at Amazon in the current quarter is now forecast to be below expectations at between $16.5 and $21.5 billion.
Caroline Hepker 1:51
Well, the latest plans for more capital spending from US big tech came as the Nasdaq 100 extended its deepest slide since April. Software stocks extended their tumble after artificial intelligence startup Anthropic rolled out a new model that's designed to carry out financial research.

What recent developments have occurred in the cryptocurrency market?

Caroline Hepker 2:11
It's the second time this week that the company has jolted markets, underscoring the competitive threat from the new technology.
Stephen Carroll 2:19
Bitcoin hit a fresh low this morning of just above $60,000 before recovering. At one point, the benchmark cryptocurrency was worth less than half its value at its October peak. Yesterday, Bitcoin fell by more than 13% in its largest single-day drop since Sam Bankman Freed's FTX collapsed in 2022. Cryptocurrencies have been on shaky ground ever since. A brutal series of liquidations last year sapped market confidence. The selling has picked up steam this week as leveraged bets have been unwound and broader market turbulence has hit crypto.
Caroline Hepker 2:56
In political news, UK Prime Minister Keir Starmer has apologised for appointing Peter Mandelson to a senior role despite his links to disgraced financier Jeffrey Epstein. Speaking during an event in England yesterday, the Prime Minister directly addressed Epstein's victims.
Keir Starmer 3:15
I am sorry.

What did UK Prime Minister Keir Starmer apologize for?

Keir Starmer 3:17
Sorry for what was done to you. Sorry that so many people with power failed you. Sorry for having believed Mandelson's lies and appointed him. And sorry that even now, you're forced to watch this story unfold in public once again.
Caroline Hepker 3:35
Keir Starmer speaking there. His apology follows a concession on Wednesday that material used to vet Mandelson for the role of UK ambassador to the United States did contain details of his links to Epstein. After the revelation, some Labour MPs helped force the government to agree to release sensitive documents about the appointment to the Cross-Party Intelligence and Security Committee for review. A YouGov poll released hours after Starmer's latest remarks showed 50% of the British public believe the Prime Minister should resign.
Stephen Carroll 4:11
To some earnings news now. The French bank Société Générale has announced a new share buyback of almost €1.5 billion after its fourth quarter profits beat estimates.

How is the Bank of England responding to current economic conditions?

Stephen Carroll 4:19
Net income came in at €1.42 billion, €200 million higher than expected. Sockgen's performance was helped by lower than expected cost and strength in its French retail bank. The lender's equity and fixed income traders had a weaker quarter, both missing estimates.

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