Summary
Amazon's recent earnings report has disappointed investors, leading to a significant drop in its stock price. While the company's cloud computing division saw growth that exceeded Wall Street expectations, overall revenue fell short, and forecasts for the upcoming holiday season are underwhelming. Investors are particularly concerned about Amazon's substantial investment in artificial intelligence, which is projected to reach $220 billion this year, primarily focused on advanced chips and data centers.
Alphabet, Google's parent company, also faced a harsh market reaction, with shares plummeting nearly 13%, marking one of the largest daily declines in Wall Street history. This downturn is attributed to increased scrutiny over the company's heavy spending on AI, which exceeded $50 billion last quarter. Concerns are growing that Google's core search and advertising business is being undermined by its AI initiatives, leading to a shift from being a cash-generative company to one that is now heavily in debt.
In other news, Nscale, a UK-based AI startup, is making a significant push for a public listing backed by a major data center project in West Virginia. The Monarch Compute Campus is crucial for Nscale, as it accounts for a large portion of its contracted revenue. Despite facing challenges in securing financing for its ambitious plans, Nscale remains optimistic about its timeline and valuation goals.
Meanwhile, European Central Bank President Christine Lagarde has announced her early departure, set for February, nine months ahead of schedule. Her exit raises questions about the future leadership of the ECB and its ability to navigate ongoing economic challenges in Europe, particularly with rising fiscal deficits and political uncertainties.
Show Notes
Alphabet’s share price fell just over 12 percent on Thursday, and UK startup Nscale is banking on a troubled US data centre project to underpin its planned $35bn IPO. Plus, we look at what’s next for the ECB now that its president Christine Lagarde announced she’s stepping down.
Mentioned in this podcast: Alphabet shares tumble in $500bn rout Inside the make-or-break AI mega-project behind Nscale’s $35bn IPO Christine Lagarde to step down as ECB president in February
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Note: The FT does not use generative AI to voice its podcasts The FT News Briefing is produced by Sonja Hutson, Saffeya Ahmed, and Josh Gabert-Doyon. Our editor is Marc Filippino. Our video producers are Zachary Alfred and Dennis Golin. Our show is mixed by Sam Giovinco and Alex Higgins. Additional help from Gavin Kallmann, Michael Lello, Vanessa Brown, Peter Barber and David da Silva. Our executive producers are Charles Bell and Topher For-HEZ. Flo Phillips is the FT’s global head of audio. The show’s theme music is by Metaphor Music.
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