# Big Tech AI CapEx Divergence and Market Impact

**Podcast:** Bloomberg Daybreak: US Edition
**Published:** 2026-01-29

## Transcript

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There's a lot going on right now, mounting economic inequality, threats to democracy, environmental disaster, the sour stench of chaos in the air.
I'm Brooke Gladstone, host of WNYC's On the Media.
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Good morning.
I'm Nathan Hager.
And I'm Karen Moscow.
Here are the stories we're following today.
Karen, the market continues to react to big tech earnings we got after the closing bell.
This morning's shares of meta platforms are surging seven and a half percent.
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 Meta 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.
Mark Zuckerberg says Meta plans to spend as much as 135 billion dollars this year on AI.
Meanwhile, Nathan, at Microsoft, spending surged to a record high while cloud sales growth slowed.
That has shares at Microsoft down more than 6% this morning.
Capital expenditures for the fiscal second quarter hit 37.5 billion dollars.
That's up 66% from a year ago.
And here's CEO Satya Nadella on the company conference call.
CEO Satya Nadella says total sales increase 17% to more than 81 billion dollars in the company is discontinuing the Model S and X.
It's it's time to basically bring the Model S and X programs to um to an end with an honorable honorable discharge.
Um because we're really moving into a future that is based on autonomy.
Elon Musk says Tesla plans to spend $20 billion dollars this year to streamline its electric vehicle lineup and shift resources toward robotics and AI.
Nathan, more news this morning on the AI front.
The information is reporting.
Nvidia, Microsoft, and Amazon are in discussions to invest as much as $60 billion in open AI as part of a major new funding round.
This could help alleviate investor concerns about open AI's cash burn.
So they have to decide.
Suggests Beijing is close to formally approving imports of components essential to powering artificial intelligence.
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, and what sales look like in China, which declined just three months ago.
Bloomberg Consensus calls for revenue to jump eleven percent higher to one hundred thirty-eight point four billion dollars, the biggest quarterly growth in four years on earnings per share of two dollars sixty-eight cents.
Tom Busby, Bloomberg Radio.
Okay, Tom, thank you.
Now let's turn from the markets to get you to the latest from Minneapolis.
The new man in charge of immigration enforcement in the city, Tom Holman, is set to hold a news conference later this morning.
President Trump sent his Border Tsar to replace Border Patrol Commander Greg Bovino in a bid to cool the uproar over the shooting deaths of two U.S.
citizens by federal agents.
Meanwhile, President Trump is warning Minneapolis Mayor Jacob Fry he is, quote, playing with fire for saying he won't change his city's immigration policies.
And Minnesota Democrat Ilhan Omar held another town hall last night after a man charged at her with a liquid during an event earlier this week.
Having to pay for security, having the government to think about providing me security if Donald Trump wasn't in office and if he wasn't so obsessed with me.
Democratic Congresswoman Ilhan Omar again.
We expect to hear from White House Borders R.
Tom Holman in a news conference from Minneapolis.
It's set for 8 30 Wall Street time, and we will bring it to you live on Bloomberg Radio and on the Bloomberg Podcast page on YouTube.
And there must be thorough, objective, and independent investigations into these killings.
Along with Minnesota's Amy Klobuchar, Senator Minority Leader Chuck Schumer has insisted that Homeland Security funds be stripped from the massive spending package that'll keep the government open after tomorrow night.
Senators from both parties say they're open to a stopgap measure for Homeland Security to allow more time for negotiations on immigration enforcement guardrails.
Let's get the latest now from Bloomberg Meteorologist Craig Allen.
Craig, good morning.
Good morning, Nathan, and good morning, Karen.
New York City right now is at 13.
Boston, 14, Washington, 15 degrees.
So, yes, the first thing that we've mentioned here is the coal.
The suburbs of all these cities have readings that are in the single digits, and the wind chills are also in the single digits to near zero.
So you're absolutely right.
We are starting off with bitter, bitter cold temperatures again.
And this isn't going away.
That's lasting through the weekend for sure.
Now, let's break this down by region for the upcoming possibility of a snowstorm.
There's definitely going to be a snowstorm across uh South Carolina, North Carolina, Southern Virginia.
How close is this going to get to Washington, D.C.?
Well, there are winter storm watches in effect as far north as the southern parts of Virginia.
Um I think DC could get grazed by this.
I think New York City, especially east of the city, uh, across Long Island and the eastern sections of New England will get grazed by it as well.
And definitely Boston will be in the works, especially out towards Cape Cod.
So heavier amounts east and south based on last night's weather maps, and lighter amounts off to the west and north.
It's still wobbling, guys.
So there is still the chance of going back and forth on this forecast.
We'll have more on that uh as we go through the morning.
Nathan, Karen?
Sounds good.
All right, Craig Allen, thank you.
And of course, we will be checking back in with you throughout the morning, as you said.
We want to turn to the economy now.
Whereas expected, the Fed held rates steady on Bloomberg's John Tucker joins us with the very latest.
John, good morning.
Good morning, Karen.
This marks the first rate pause since July.
And at his news conference, after the decision, heard here live on Bloomberg Radio, Fed share Jerome Powell says they're still waiting to see the impact of tariffs before committing to rate cuts.
The expectation is that we will see uh the effects of um of tariffs flowing through goods prices peaking and then starting to come down.
Well, the decision to hold state uh rates steady yesterday was approved on a ten to two vote, with the governor's Christopher Waller and Stephen Myron dissenting in favor of a cut.
Waller's dissent in favor of a rate cut, seen as keeping him in the race to replace Powell as chair of the Federal Reserve.
In New York, I'm John Tucker, Bloomberg Radio.
All right, John, thank you.
We're seeing commodities rally this morning.
In fact, gold is up for a ninth straight day, surging above fifty, five hundred dollars an ounce.
The rally's been fueled by a weaker dollar, and investor flight from sovereign bonds and currencies.
Spot gold has risen by nearly thirty percent this year.
Time now for a look at some of the other stories making news in New York and around the world.
And for that, we're joined by Bloomberg's Michael Barr.
Michael, good morning.
Good morning, Karen.
Former New York mayor Eric Adams is responding to criticism about the budget from current mayor Zaron Mamdani.
The newly sworn in Democratic Socialist Mayor argues additional money from the state is necessary because the city faces a fiscal crisis created by Adams and by a push from former Governor Andrew Cuomo to shift costs from the state on to the city.
We did not arrive at this place by accident.
This crisis has a name and a chief architect.
In the words of the Jackson Five, it's as easy as ABC.
This is the Adams budget crisis.
Mdani says over two years New York is staring at a $12.6 billion budget gap.
Adams refuted the claim, saying the city was upgraded by bond rating companies and had ample reserves under his leadership.
President Trump warned Iran to make a nuclear deal with the U.S.
or face military strikes far worse than the attack he ordered last June.
Iran said it stands ready for dialogue based on mutual respect and interests, but warned that it will defend itself and respond if pushed.
Police say a man repeatedly crashed his car into the Chabad Lubovich World Headquarters in New York City.
The incident happened last night while people were gathered for prayer of the Hasidic Jewish site.
No one was injured.
Police Commissioner Jessica Tisch.
This incident is currently being investigated as a hate crime by the NYP's hate crimes task force.
The driver was arrested.
Global News 24 hours a day, and whenever you want it with Bloomberg News Now, I'm Michael Barr, and this is Bloomberg, Karen.
Thanks, Michael.
Time now for our Bloomberg Sports Udate.
And for that, we bring in John Stash Hour.
Thanks, Karen.
59-year-old Todd Munkin, named the new coach of the Cleveland Browns.
He was an assistant once with the Browns, then went to Georgia.
Last three years he's coached the offense in Baltimore.
The NBA trade deadline next Thursday, the Milwaukee Bucks is 18 and 27.
Their star Giannis SundaCampo, currently out with a cap injury.
The Bucks are said to be open to listen to trade offers involving Giannis.
LeBron James back in Cleveland, maybe for the last time.
And the Cavs blew out the Lakers by 30.
That's a Bloomberg Sports Update.
Stay with us.
More from Bloomberg Daybreak.
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Good morning.
I'm Nathan Hager.
The AI spending boom is in full swing, and the biggest names in big tech are being rewarded for it if they can show it's paying off.
This morning, investors seem to think that's the case for Meta platforms for Microsoft.
Not so much.
Joining us this morning is Mandeep Singh, global head of technology research for Bloomberg Intelligence.
Man Deep, we heard Meta says it's going to spend up to 135 billion on CapEx this year.
Microsoft just this quarter, 37 and a half billion.
Meta shares up, Microsoft shares down.
What gives?
Well, uh, so in the case of Meta, I mean, the core business seems to be accelerating.
And what they highlighted last night was uh look, I mean, we are spending all this money, but we already see some return in terms of our ad conversions, better recommendation systems, and eventually we'll be launching separate products in terms of you know having an AI assistant uh that will uh work uh within the apps as well as content generation tools.
So uh the investors seem to have given them a green light in terms of you know investing upfront uh with the hope that they will launch new products that can that they can monetize uh you know uh later in the year.
So clearly that core business acceleration was key.
In the case of Microsoft, I mean it was a fine quarter.
The Azure growth was uh 38% instead of 39%.
And what they said is uh look, we are using a lot of the GPUs internally to develop our uh new applications instead of renting them out, you know, uh on Azure.
And from that perspective, they are supply constrained like uh all the other companies are.
And uh, you know, uh I uh kind of feel like uh everyone uh is uh you know compute constrained right now.
So that's where uh memory prices are having an impact, and all the things that are going on in terms of the chip uh prices are having an impact uh around, you know, what these companies are able to do around uh creating that infrastructure.
So uh overall it was a very uh good quarter for Microsoft.
It's just expectations were slightly higher, and that's where uh probably the investors still like that Azure print.
So, in just 30 seconds, man, Deep, how does that set us up for when we're gonna hear from Apple later on today?
I mean, memory prices.
So Microsoft called out how memory prices are having an impact on their window sales.
So I do expect Apple to acknowledge memory prices uh impacting their gross margins, and uh we'll find out if it's if it had an impact on their hardware sales during the quarter.
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