Chapter 1: What is the main topic discussed in this episode?
The UK stands apart as a place to do business, not because of one advantage, but many working together. Over Ā£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.
News when you want it with Bloomberg News Now. I'm Stephen Carroll.
And I'm Caroline Hepker.
The world's largest tech firms are showing no signs 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. Meta CEO Mark Zuckerberg says the cash is needed to front-load computing capacity.
and the company is already seeing a payoff in the way AI is being used internally.
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.
Mark Zuckerberg speaking there on Meta's earnings call as the firm's better than expected sales outlook helped to ease market concerns over record spending. Meta's shares jumped almost 7% in after hours trading.
Despite those gains, 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 more than $37 billion came as the firm also announced a slowdown in cloud services growth.
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Chapter 2: What are the latest trends in AI spending by tech firms?
Deutsche Bank has announced a ā¬1 billion share buyback as it reported pre-tax profits of just over ā¬2 billion for the fourth quarter. That figure came in ahead of expectations as revenue from fixed income trading at the bank also beat estimates at ā¬2 billion.
The results come less than 24 hours after Deutsche Bank's offices were raided by German authorities as part of a money laundering probe looking at past dealings by staff with firms linked to Roman Abramovich. The news had driven the bank's share price lower. It closed down 2%.
Europe's biggest software company, SAP, has forecast cloud revenue will grow in 2026 as customers shift from older technology. The German firm expects cloud revenue and constant currencies to grow at least 23% this year and announced a share buyback of as much as 10 billion euros through the end of 2027.
The emergence of artificial intelligence-powered tools has fueled concerns about enterprise software companies, even as SAP has been pivoting away from selling software licenses to a cloud subscription model. SAP, run by CEO Christian Klein, is still Germany's most valuable company, but the stock is down 30% since its all-time high last February.
Now, let's turn to some geopolitics. UK Prime Minister Keir Starmer has called for a more sophisticated relationship with China during an historic visit to the country. Speaking during a meeting with Chinese President Xi Jinping this morning, Starmer also called for meaningful dialogue on areas of disagreement.
Peter Burnett, chief executive of the China-Britain Business Council, says firms are hoping for more favourable conditions following the talks.
I think if we can move to less friction in services more generally, greater market access, because services is a big component of the UK economy. It's been recognized in the 15th five-year plan as a growth area for China. So there's a very natural combination of the two, if you like.
Peter Burnett speaking there from Beijing. Starmer is the first British Prime Minister in eight years to visit China as part of a broader charm offensive designed to reset relations. Frozen since 2018 over alleged human rights abuses and other issues, China's official Xinhua news agency has hailed the event as a pivotal moment while urging the UK to adopt policies free from external influence.
US President Donald Trump has warned Iran that time is running out to make a nuclear deal with the United States. In a social media post yesterday, Trump said a fleet of American ships ordered to the region is ready to fulfil its mission with speed and violence if necessary. The latest remarks come after repeated threats from the White House to launch another attack over Iran.
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