Major tech companies significantly increase their investment in artificial intelligence, with massive financial commitments.
In a recent development, the US Federal Reserve maintained interest rates at current levels, disregarding dissent and pressure from President Trump [1]. Meanwhile, the Federal Trade Commission (FTC) has taken a different approach, with the agency accusing Exxon CEO Scott Sheffield of attempting to manipulate global oil prices and barring him from Exxon's board [2].
Elsewhere in the corporate world, executives are focusing on beefing up building security following the tragic shooting in Manhattan [3]. On the tech front, Google has announced plans to spend $85 billion on capital expenditures for the year [4].
Exxon, however, has not been idle. The company has agreed to acquire shale giant Pioneer and granted its CEO a board seat [5]. But the regulatory body's actions have raised questions about the use of politics to push its own agenda [6].
Scott Sheffield, for his part, has turned down an offer to end his career with a plum posting at Exxon, citing a rushed, baseless, and illegal order that breached the commitment made to him [7].
Meanwhile, Meta's core businesses continue to generate profits, and the company has posted a strong second-quarter sales beat, attributing the success to AI-driven improvements in ad efficiency [8]. Meta's stock has surged over 8% since the earnings report, indicating investor confidence that its AI investments are paying off [8].
Microsoft and Alphabet, too, are leading in capital expenditures on AI infrastructure. Microsoft is projected to spend $88.7 billion in fiscal 2025, while Alphabet has increased its capital expenditure guidance to $75 billion, a 43% rise year-on-year [9][10]. However, while these investments are substantial, explicit evidence of immediate sustainable profits from these outlays is less directly stated [9][10].
Amazon's large AI and cloud investments have not yet convinced investors, as it reported tepid cloud sales and stock declines, highlighting that not all big tech AI spending translates into near-term profitability [8].
In a reminder that the edicts of one administration can be revisited by the next, the FTC, under a new appointee of President Donald Trump, overturned the ban on Exxon CEO Scott Sheffield earlier this month [2]. Companies that bend to short-term political expedience may end up regretting it when the winds inevitably change again [11].
The FTC is also using its leverage over corporate dealmaking to extract a pound of flesh, a tactic that traditionally belongs to both political parties [11]. In a recent move, the FTC is conditioning approvals for an advertising merger on a free-speech test that will benefit Elon Musk's X [11].
References:
- The US Fed Keeps Interest Rates Steady Despite Dissent and Trump Pressure
- FTC Accuses Exxon CEO Scott Sheffield of Trying to Fix Global Oil Prices and Bans Him from Exxon's Board
- Executives Looking to Beef up Building Security After the Manhattan Shooting
- Google's Capital Spending Plans for the Year are $85 Billion
- Exxon Agreed to Buy Shale Giant Pioneer and Give its CEO a Board Seat
- The Regulatory Body's Actions May be Considered as Using Politics to Push its Own Agenda
- Scott Sheffield Turned Down the Offer to End his Career with a Plum Posting at Exxon, Accusing the Company of Signing a Rushed, Baseless, and Illegal Order that Broke the Commitment Made to Him
- Meta's CEO, Mark Zuckerberg, Believes AI will Generate Cheaper, Better, and More-Targeted Ads
- Meta Doubled its Quarterly Capital Spending from a Year Ago, to $16.5 Billion
- Microsoft and Alphabet are Leading in Capital Expenditures on AI Infrastructure
- The FTC is Using its Leverage over Corporate Dealmaking to Extract a Pound of Flesh, a Tactic that Traditionally Belongs to Both Political Parties
- Despite the political pressure from President Trump, the US Federal Reserve maintained its focus on business and finance, choosing to keep interest rates at current levels.
- In an unexpected turn of events, the Federal Trade Commission (FTC), known for its role in business regulation, has entered the world of technology by conditioning approvals for an advertising merger on a free-speech test, benefiting Elon Musk's X.
