AI Is Top of Mind as Big Tech Firms Report Earnings

Four of the biggest US companies—Alphabet, Amazon, Meta and Microsoft—reported earnings after the bell on Wednesday. And it’s all about AI.

Meta raised its spending outlook for the year, extending its streak of plowing historic levels of investment into the artificial intelligence race. The social-media giant projected full-year capital expenditures between $125 billion and $145 billion, far exceeding analysts’ estimates. Shares fell 4.4% in after-hours trading. They had risen 1.4% this year through Wednesday’s close in New York.

Alphabet reported quarterly revenue and profit that beat projections. Google’s parent company said first-quarter revenue, excluding partner payouts, was $94.7 billion, compared with the $91.6 billion expected on average by analysts, according to data compiled by Bloomberg.

Amazon’s cloud unit posted its fastest quarterly growth in more than three years, bolstered by new data center capacity and an increasing slice of business from Anthropic and OpenAI. Still, capital spending for that effort jumped to $44.2 billion in the first quarter, exceeding analysts’ expectations, a sign that Amazon is seeing higher expenses for the build-out than anticipated.

Microsoft, for its part, reported strong growth in its cloud-computing business, suggesting it’s capitalizing on massive demand for AI services. The Azure unit posted a 39% revenue gain during the fiscal third quarter when adjusting for currency fluctuations, the company said. That narrowly surpassed the average analyst estimate of 38% growth. —Jordan Parker Erb

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Federal Reserve officials left interest rates unchanged, but revealed a deepening division over the outlook for policy amid increased uncertainty caused by the US-Israel war with Iran. Four officials voted against the decision, including three who objected to language in their post-meeting statement that suggested the central bank would eventually resume cutting rates.

In what will likely be his last press conference as Fed Chair, Jerome Powell said he intends to remain at the central bank as a member of its Board of Governors. Kevin Warsh, President Donald Trump’s nominee to be the next chair, won the backing of the Senate Banking Committee Wednesday, putting him on track to be confirmed by the full Senate before Powell’s term ends May 15. The vote came after the Trump administration shelved its unprecedented and widely criticized criminal probe of the Fed Chair.

The six Republican appointees to the US Supreme Court on Wednesday handed the GOP a huge victory in this midterm election year. The court’s conservative supermajority restricted the use of the Voting Rights Act to create predominantly Black or Hispanic election districts. The landmark ruling will further empower Republican-controlled states to gerrymander districts in an effort to eliminate Democratic-leaning Congressional districts.

The justices rejected a Louisiana congressional map that was drawn with a second majority-Black district after a lower court found an earlier map to be discriminatory, and set a difficult test for any future efforts. The three Democratic-appointees to the court wrote that the majority was eviscerating the landmark civil rights law. Indeed, the ruling undercuts what had been the most significant remaining part of the Voting Rights Act, a law passed in 1965 to address rampant discrimination against Black voters.

The ruling came just as Florida legislators moved to join Texas in a Trump-demanded, mid-decade redistricting push by red states, another front in the party’s fight to protect its slim majorities in the House and Senate. The unorthodox campaign triggered counter-efforts in blue states such as California and Virginia.

Trump told Axios he will not lift a naval blockade of Iran’s ports until he secures a deal with Tehran to address the country’s nuclear program, extending a standoff over the Strait of Hormuz that’s triggered a global energy crisis. Trump told the outlet he had rejected a recent proposal by Iran to reopen the strait, which would have delayed talks on the nuclear issue until later.

The news comes at the start of the war’s third month. On Feb. 28, the US and Israel launched a surprise attack on Iran as negotiations over Iran’s nuclear program were ongoing. In the months before, Iranian security forces killed thousands of Iranian demonstrators. Since the war began, thousands more have been killed in Iran and in Lebanon, where Israel opened a second front amid attacks by Iran-aligned Hezbollah.

The United Arab Emirates’ worsening rift with Saudi Arabia was at the heart of its shock decision to quit OPEC. The rivalry has been building for years but it was the fallout from the Iran war that provided the opportunity for Tuesday’s announcement from the UAE, according to several people familiar with the matter. It was, one of them said, akin to “little brother” no longer wanting to be tied down by “big brother.”

As sharply rising healthcare premiums eat into workers’ pay, young, healthy professionals are rejecting employer-sponsored insurance. Instead, they’re going without coverage or finding cheaper options, saying they can’t afford to be on the company plan.

Any further delay to solving America’s public debt, now approaching $40 trillion, will make an orderly solution harder to envisage, writes Bloomberg Opinion columnist Clive Crook. Eventually a point will come where a well-planned remedy is impossible, because the fiscal adjustments would crash the economy. At that point, the only remedy will be default, explicit or by means of high inflation. Americans need to take this disturbing prospect much more seriously, Crook writes.

His warning comes as some in Congress push for capital gains tax cuts that would largely benefit the wealthy, adding more to the deficit less than a year after a massive tax-and-spending bill packed trillions onto the national debt.

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