Big Tech AI Spending Surges, Fed Holds Rates Steady: Bloomberg Daybreak

Big Tech AI Investment Surge

• 🚀 Meta Platforms is projecting unprecedented spending of up to $135 billion this year on AI, with CEO Mark Zuckerberg anticipating AI will dramatically change work by 2026.
• 💡 Meta is investing in AI-native tooling to enhance individual productivity and flatten teams, enabling single individuals to accomplish tasks previously requiring large groups.
• 📈 Microsoft's capital expenditures reached $37.5 billion in the fiscal second quarter, a 66% increase year-over-year, as CEO Satya Nadella highlighted the early stages of AI diffusion and its broad GDP impact.
• ⚠️ Despite strong sales growth, Microsoft shares dipped due to concerns over cloud sales growth slowing and significant internal GPU usage for AI development rather than external rental.
• 🚗 Tesla plans to spend $20 billion this year on streamlining its EV lineup and shifting resources to robotics and AI, including discontinuing the Model S and X to focus on Optimus humanoid robots and robotaxi development.
• 💰 Nvidia, Microsoft, and Amazon are reportedly in discussions to invest up to $60 billion in OpenAI to support its funding round and alleviate concerns about its cash burn.

Federal Reserve Holds Interest Rates Steady

• 📊 The Federal Reserve has held interest rates steady, marking the first pause since July, with Fed Chair Jerome Powell expressing cautious optimism about the US outlook and a steadying job market.
• 📉 Officials see no immediate need for further rate cuts to support the economy, with futures markets anticipating no shift before June.
• 🏛️ Governor Stephen Miran and Governor Christopher Waller were the only officials who voted for another cut, with Waller's dissent potentially keeping him in contention to replace Powell as Fed chair.

Other Market and Economic News

• 🍎 Apple is expected to report its biggest sales quarter ever, driven by iPhone 17 sales, though concerns remain about rising component costs, particularly memory chips, and sales performance in China.
• 📈 Gold prices have surged for the ninth consecutive day, surpassing $5,500 an ounce, fueled by a weaker dollar and investor flight from sovereign bonds and currencies.
• 🏙️ New York City Mayor Eric Adams refuted claims of a fiscal crisis created by his administration, asserting the city had ample reserves and received upgrades from bond rating companies under his leadership.
• ⚠️ Former Mayor Adams is responding to criticism about the budget from current Mayor Eric Adams, who argues additional state funding is necessary due to a fiscal crisis allegedly created by Adams and a push from former Governor Andrew Cuomo to shift costs to the city.
• ⚡ President Trump warned Iran against pursuing nuclear deals, threatening military strikes, while Iran stated readiness for dialogue but vowed self-defense if pushed.
• 🚓 An incident involving a car crashing into the Chabad Lubavitch World Headquarters in New York City is being investigated as a hate crime.

Weather and Sports Updates

• 🥶 Bitterly cold temperatures are expected to persist through the weekend across the Northeast, with single-digit wind chills.
• 🌨️ A winter storm is anticipated across South Carolina, North Carolina, and southern Virginia, with potential impacts grazing Washington D.C., Long Island, and eastern New England.
• 🏈 Todd Monkin has been named the new coach of the Cleveland Browns.
• 🏀 The Milwaukee Bucks are reportedly open to trade offers involving star player Giannis Antetokounmpo, who is currently out with a calf injury.