Some of the world’s biggest tech giants reported quarterly earnings on Wednesday – with a mixed bag of results as fears grow that a bubble is forming in artificial intelligence.

Microsoft revealed that its spending on AI infrastructure hit almost $35bn (£26.5bn) in the three months to the end of September, a sharp rise compared with the year before.

Despite revenue jumping 18% and net income rising 12%, shares plunged by close to 4% in after-hours trading, with investors concerned about the mounting costs of sustaining the boom.

Microsoft’s vice president of investor relations Jonathan Neilson said: “We continue to see demand which exceeds the capacity we have available.

“Our capital expenditure strategy remains unchanged in that we build against the demand signal we’re seeing.”

Big Tech is facing increasing pressure to show returns on the massive AI investments they’re making, against a backdrop of soaring valuations and limited evidence of productivity gains.

Microsoft became the world’s second most valuable company this week thanks to its 27% stake in OpenAI, the creator of ChatGPT.

Its market capitalisation surged beyond $4trn (£3trn) at one point, but that psychologically significant threshold is now in doubt because of recent selloffs.

Alphabet makes history

Last night’s results weren’t all doom and gloom – with shares in Google’s parent company surging by 6% in after-hours trading.

Alphabet has also set out aggressive spending ambitions, but placated investors thanks to an impressive set of results that surpassed analysts’ expectations.

Total revenue for the quarter stood at a staggering $102.35bn (£77bn), with the search giant’s advertising unit remaining robust despite growing competition.

But concerns linger that Alphabet’s dominance in search could be undermined by AI startups, with OpenAI recently unveiling a browser designed to rival Google Chrome.

Hargreaves Lansdown’s senior equity analyst Matt Britzman shrugged off this threat – and believes the company is “gearing up for long-term AI leadership”.

He said: “Alphabet just delivered its first-ever $100bn quarter, silencing the doubters with standout performances in both Search and Cloud.

“AI Overviews and AI Mode are clearly resonating with users, helping to ease fears that Google’s core search business is under threat from generative AI.

“With ChatGPT’s recent browser demo falling short of a game-changer, Google looks well-placed to put up a strong defence as gatekeeper to the internet.”

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Meta faces a mauling

Meta – the parent company of Facebook, Instagram, and WhatsApp – saw its shares tumble by as much as 10% in after-hours trading.

Mark Zuckerberg’s tech empire anticipates “notably larger” capital expenses next year as it ramps up investments in AI and goes on a hiring spree for top talent.

Net income in the third quarter stood at $2.7bn (£2bn) and suffered an eye-watering $16bn (£12bn) hit because of Donald Trump’s “Big Beautiful Bill”.

Meta was late to the party on AI but has now doubled down on this still-nascent technology – setting an ambition to achieve superintelligence, a milestone where machines could theoretically outthink humans.

The social networking giant continues to benefit from its massive user base, and expects fourth-quarter revenues of up to $59bn (£44bn).

Victims of the Post Office Capture scandal say they are being treated as second-class citizens – accusing the government of running a “two-tier” compensation system.

It comes as the Department for Business and Trade announced the launch of the first-ever redress scheme for those wronged after faulty software created false accounting shortfalls in the 1990s.

Capture was used between 1992 and 1999 in up to 2,500 Post Office branches, with many sub postmasters making up cash losses themselves.

A government-commissioned report last year found it was likely the software caused accounting errors.

The Capture Redress Scheme will provide payments of up to £300,000, and more in “exceptional” cases, to former postmasters who suffered financial losses.

Steve Marston, who was convicted in 1998 of stealing from his branch and is not yet eligible to apply to the scheme, said other victims were feeling “frustrated” with it.

“I want to know, what do they consider exceptional circumstances?” he said, “because I want it to see it in black and white what they consider as exceptional circumstances rather than just a vague statement.”

He said that victims felt like “second-class” citizens, describing the Horizon schemes and the new Capture scheme as “two-tier” systems.

“[It’s] one law for the Horizon victims, and a totally different law for us Capture victims and that’s not really fair.

“One of the main bones of contention is the fact that with Horizon there’s a right of appeal against decisions, and you’ve got multiple rights to appeal.

“Whereas with the Capture appeal process, there’s only a one-shot chance, so basically, it’s a second-class system.”

The scheme will be tested for the first 150 claimants before a full roll-out.

Chris Roberts, whose mother Liz was jailed in 1999 for theft, is one of them and said victims were concerned about the “glacial pace” of government.

He is able to apply to the redress scheme on behalf of his father, who was a postmaster alongside his mother, who oversaw accounts.

Both Liz and Bill Roberts have passed away.

“I’d hate us to get to the point where, you know, this scheme’s come out and we go through these 150 cases and then it’s further developed … and half the people it would apply to are gone,” Chris said.

“We will lose people before they can see justice, and I think that’s a terrible tragedy.”

Under the Capture scheme, eligible claimants will receive an immediate interim payment of £10,000.

An independent panel will then assess final awards through a banding model ranging from £10,000 to £300,000, with higher payments in exceptional circumstances.

The Post Office Minister Blair McDougall, speaking exclusively to Sky News, said he understood why victims have “low levels of trust in the state”.

He said: “They’ve been treated appallingly by the state, but what we’ve done with this scheme is to try to learn some of those lessons from previous compensation schemes for postmasters that didn’t work.

“So we’re collecting more evidence from the beginning to try to speed things up.

“We’re trying to give sub postmasters the benefit of the doubt throughout this. And I hope we will see that this scheme treats them with a bit more dignity and a bit more urgency.”

He also said that funds overall for the Capture scandal were “uncapped”, with “no ceiling” on compensation.

Mr McDougall also said that the government was working “as fast as we possibly can, and that’s because people have waited so long”.

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When asked if he would personally guarantee speedy redress, he replied: “Absolutely – that’s what we are doing today, to make sure that we have a scheme that gets people’s redress as quickly as possible.

“But it’s challenging, because we’re dealing with cases where there’s not a lot of evidence. So much time has passed.

“So we tried to design a scheme to get postmasters the benefit of the doubt and to try to be as fair as possible.”

He said within the scheme there was the “opportunity” for victims to make a “wider case of the impact on their lives – and if the independent panel feels that there is a compelling case, they can go beyond that £300,000”.

High street bank Santander has launched a scathing criticism of the car finance compensation scheme and delayed the release of its financial results “in light of uncertainties” it has caused.

The Spanish-owned lender called for government intervention – warning it sees the scheme as posing a wider threat to the economy, jobs and consumers.

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The scheme was set up by financial regulator, the Financial Conduct Authority (FCA), to compensate people mis-sold car loans.

Under FCA proposals, up to 14.2 million people could each receive an average of £700, as lenders broke the law by failing to disclose they paid commission to brokers. It meant customers lost out on better deals and sometimes paid more.

The proposal differs, Santander said, “in important respects” from the Supreme Court ruling that paved the way for the redress plan.

Mr Regnier said: “We believe that the level of concern in the industry and market is such that material changes to the proposed FCA redress scheme should be an active consideration for the UK government.

“Without such change, the unintended consequences for the car finance market, the supply of credit and the resulting negative impact on the automotive industry and its supply chain could significantly impact jobs, growth and the broader UK economy.

“This could also cause significant detriment to the consumer.

“What is at stake is the supply of credit that customers need and that supports a very important sector for the economy.”

Deferred results

Santander was due to publish its latest financial figures on Wednesday morning, but has held back until it says it gets “greater clarity” on the scheme and its impact on the bank and the wider market.

No new date to report results was given. Release of the same third-quarter results last year was also deferred due to uncertainty over the impact of car loan mis-selling.

The hit to Santander, however, is not expected to impact its operations or financial position, even in a worst-case scenario for the bank where it has to allocate more funds for compensation, it said.

It had already set aside £295m to deal with the mis-selling.

The FCA said, “We believe a compensation scheme is the best way to settle, for both lenders and consumers, liabilities that exist no matter what.

“Alternatives would cost more and take longer. It’s vital we draw a line under the issue so a trusted motor finance market can continue to serve millions of families every year.”

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Santander said it was committed to “ensuring fair outcomes” for its customers and will continue engaging constructively with the FCA, HM Treasury and other stakeholders.

Santander UK shares were up 0.5% following the news.