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.
Image: Microsoft is now a $4trn company thanks to its stake in ChatGPT maker OpenAI. AP file pic
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.
Image: iStock file pic
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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1:16
Browser could ‘change the way we use the internet’
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).
Russian foreign policy aide Yuri Ushakov and investment envoy Kirill Dmitriev were involved in the talks, which lasted over five fours and ended after midnight.
Both sides agreed not to disclose precise details, but in a one-word social media post, Mr Dmitriev described the meeting as “productive”.
Mr Ushakov called it “rather useful, constructive”, and asked whether peace was closer or further, Mr Ushakov commented: “Not further, that’s for sure”.
However, he said a compromise hadn’t been reached on the issue of territories and that the Kremlin sees “no resolution to the crisis” without one.
Russia wants the whole of the Donbas region – even the parts it does not hold – but Ukraine has balked at the prospect.
Mr Ushakov said there was “still a lot of work to be done, both in Washington and in Moscow” and that “contacts will continue”.
Image: The two sides were joined by translators. Pic: Sputnik/AP
Image: Pic: Reuters
Image: Jared Kushner and Steve Witkoff were joined by Kirill Dmitriev (2nd right) and Yuri Ushakov (left). Pic: Reuters
The meeting took place after an initial 28-point US peace plan was leaked and alarmed European officials, who said it heavily favoured Russia.
An “updated and refined peace framework” was formulated after talks between Europe, the US and Ukraine in Geneva last month.
Earlier on Tuesday, Mr Putin said Russia was ready to fight if Europe wanted a war.
The Russian president accused European powers of changing peace proposals for Ukraine with “demands” that Russia considered “absolutely unacceptable”.
Mr Putin said the Europeans were “on the side of war”.
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2:56
Putin ‘lashes out’ at Europe
“We’re not planning to go to war with Europe, I’ve said that a hundred times,” he said following an investment forum.
“But if Europe suddenly wants to fight us and starts, we’re ready right now. There can be no doubt about that.”
“If Europe suddenly wants to start a war with us and does, then a situation could very quickly arise in which we have no one to negotiate with,” he added.
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Putin trying to frighten US away from Europe with war remarks
Zelenskyy in Dublin
Ukraine’s President Volodymyr Zelenskyywas in Dublin on Tuesday to meet Ireland’s prime minister and president.
During the trip, Mr Zelenskyy said he was ready to meet Mr Trump again but it would depend on how successful the Moscow talks were.
He said the chances of ending the war were “better now than ever” but warned there would be “no easy decisions” and there must be “no games behind Ukraine’s back”.
Image: President Zelenskyy had a guard of honour in Dublin. Pic: Reuters
Calling it “one of the most challenging but optimistic moments” since Russia invaded in 2022, he said the US was “taking serious steps to end this war one way or another”.
He admitted “some things still need to be worked out” and said a “decent, dignified peace” was needed.
Image: President Zelenskyy, his wife Olena, and Irish President Catherine Connolly. Pic: Reuters
The Irish government announced €100m (£88m) in non-lethal aid for Ukraine, “generosity” for which Mr Zelenskyy said Ukraine was grateful.
It brings the total in non-lethal military aid provided to Ukraine this year to €200m (£176m).
The funding is part of a new Ireland-Ukraine partnership, which builds on an agreement signed last year.
It includes €25m (£22m) for the restoration and protection of energy infrastructure and a scheme to support training and other efforts as part of Ukraine’s path to EU accession, which Mr Zelenskyy said he hoped to achieve within five years.
The Pope has urged Donald Trump not to try to oust Venezuelan President Nicolas Maduro using military force.
Leo, the first American pontiff, said it would be better to attempt dialogue or impose economic pressure on Venezuela if Washington wants to pursue change there.
The Trump administration has been weighing options to combat what it has portrayed as Mr Maduro’s role in supplying illegal drugs that have killed Americans.
The socialist Venezuelan president has denied having any links to the illegal drug trade.
Image: Pope Leo XIV aboard a flight to Rome. Pic: Reuters
Asked during a news conference about President Trump’s threats to remove Mr Maduro by force, the Pope said: “It is better to search for ways of dialogue, or perhaps pressure, including economic pressure.”
He added that Washington should search for other ways to achieve change “if that is what they want to do in the United States”.
The Pope was speaking as he flew home from a visit to Turkey and Lebanon – his first overseas trip in the role.
Image: Venezuela’s President Nicolas Maduro in Caracas. Pic: Reuters
The president held a rally in Caracas amid heightened tensions with Mr Trump’s administration, which has been targeting what it says are boats carrying drug smugglers.
Mr Trump met his national security team on Monday evening, having warned last week that land strikes would start “very soon”.
It’s not been confirmed what was discussed at the meeting, but White House press secretary Karoline Leavitt told reporters: “There’s many options at the president’s disposal that are on the table – and I’ll let him speak on those.”
US forces have carried out at least 21 strikes on boats it claims were carrying narcotics to its shores over the last few months.
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‘The president has a right to take them out’
Mr Maduro – widely considered a dictator by the West – said on Monday that Venezuelans are ready “to defend [the country] and lead it to the path of peace”.
“We have lived through 22 weeks of aggression that can only be described as psychological terrorism,” he said.
Venezuela has said the boat attacks, which have killed more than 80 people, amount to murder – and that Mr Trump’s true motivation is to oust Mr Maduro and access its oil.
This breaking news story is being updated and more details will be published shortly.
“Many options” are on the table to deal with Venezuelan drug gangs, the White House has said, as the US considers attacking on land.
President Trump is meeting his national security team on Monday and could discuss what would be a major escalation in strikes that have so far only targeted boats.
Karoline Leavitt, the president’s press secretary, did not detail what the meeting would focus on. However, Mr Trump said last week that land strikes would start “very soon”.
“There’s many options at the president’s disposal that are on the table – and I’ll let him speak on those,” Ms Leavitt told reporters.
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0:59
Three killed as US strikes another alleged drug boat
American forces have carried out at least 21 strikes on boats it claims were carrying narcotics to its shores over the last few months.
The US has accused Venezuelan President Nicolas Maduro of being involved in the drugs trade – a claim he denies.
Venezuela has said the attacks, which have killed more than 80 people, amount to murder and that President Trump’s true motivation is to oust Mr Maduro and access its oil.
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President Maduro – widely considered a dictator by the West – said on Monday that Venezuelans are ready “to defend [the country] and lead it to the path of peace”.
“We have lived through 22 weeks of aggression that can only be described as psychological terrorism,” he said.
Concerns have been raised over the legality of the US attacks, which the Pentagon has sought to justify by designating the gangs as foreign terror organisations.
Image: Image of an alleged drug boat being targeted by the US military. Pic: Truth Social
Tensions remain high over America’s large deployment in the Caribbean Sea and eastern Pacific, which includes its flagship aircraft carrier and thousands of troops.
The US has released videos of boats being blown up but has not provided evidence – such as photos of drugs – to support the smuggling claims.
Image: President Maduro is widely considered a dictator by the West. Pic: Reuters
Controversy also surrounds the first incident, on 2 September, in which 11 people were killed – with a follow-up strike targeting the boat after the first attack left two survivors in the water.
US media reported defence secretary Pete Hegseth gave an order beforehand that everyone on board should be killed.
However, there are concerns about the legality of the second strike if the survivors posed no threat.
Mr Hegseth dismissed the reporting as “fake news” and insisted all actions in the region are compliant with US and international law.
“Every trafficker we kill is affiliated with a Designated Terrorist Organization,” he said on X.
President Trump said on Sunday he would not have wanted a second strike and that Mr Hegseth had denied giving such an order.
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8:25
Is US about to go to war with Venezuela?
Ms Leavitt confirmed on Monday that the boat had been hit by a second strike – but denied Mr Hegseth gave the order for the follow-up.
Instead, she said he had authorised US navy vice admiral Frank Bradley to attack and the admiral acted “well within his authority and the law, directing the engagement to ensure the boat was destroyed and the threat to the US was eliminated”.
As the US weighs its next steps, Mr Trump said on Sunday he had spoken to President Maduro by phone and that the conversation went neither “well or badly”.
In recent days, he also stated that Venezuela’sairspace should be considered closed – with the South American nation calling it a “colonial threat” and “illegal, and unjustified aggression”.