Big Tech lines up $300bn of AI spending

Good morning and welcome back for the final workday of the week. You made it! On today’s agenda we have:

• Big Tech plans $300bn of AI spending

• Altman and Son’s growing ‘bromance’

• Trump promises PE tax loophole crackdown

• Iowa farmers’ trade war fears

• And the case for ‘late bloomers’

Big Tech’s massive spending on artificial intelligence is set to continue unchecked in 2025, adding to investor nervousness.

Microsoft, Alphabet, Amazon and Meta reported combined capital expenditure of $246bn in 2024, up from $151bn in 2023. They forecast spending this year could exceed $320bn.

The scale of their spending ambitions — announced alongside fourth-quarter earnings — has surprised the market and exacerbated a sell-off caused by the release of an innovative and cheap AI model from Chinese start-up DeepSeek late last month.

Amazon last night became the latest tech group to outline its spending plans. Chief executive Andy Jassy topped Google and Microsoft by forecasting more than $100bn in capital expenditure this year, up from $77bn in 2024 and more than double the $48bn of the previous year.

The spending commitments have unnerved Wall Street. Alphabet, Amazon and Microsoft shares have fallen in recent sessions. Meta, however, has bucked that trend. Here’s more on the growing nervousness around Big Tech.

Here’s what else we’re keeping tabs on today and over the weekend:

• Economic data: The Labor Department releases non-farm payrolls and updates the unemployment rate for January. Chile and Mexico publish inflation statistics for covering last month.

• IPOs: Belgium-based cement producer Titan America is expected to list its shares on the New York Stock Exchange, seeking a valuation of up to $3.32bn.

• US-Japan relations: Japanese Prime Minister Shigeru Ishiba meets Donald Trump in Washington today for high-stakes talks.

• Results: Cboe Global Markets publishes annual results.

• Elections: Voters go to the polls in Kosovo, Liechtenstein and Ecuador on Sunday.

• Super Bowl LIX: The 59th Super Bowl takes place in New Orleans on Sunday, with the Kansas City Chiefs competing against the Philadelphia Eagles.

Five more top stories

1. Donald Trump has told lawmakers he wants to end the special tax treatment of private equity and hedge fund profits known as “carried interest”. The push by Trump — in a White House meeting yesterday with Republican leaders from Capitol Hill — comes as the president intensifies talks over a broader tax cut bill. The president is setting up a potential clash with some of America’s wealthiest financiers. And read more on what carried interest is.

• Department of the Treasury: A federal judge barred the Treasury department from handing data from its payments system to outsiders yesterday and one of Elon Musk’s staffers was forced to resign over racist social media posts.

• USAID: The Trump administration plans to retain only a few hundred employees from the US Agency for International Development’s staff of thousands, according to four people familiar with the matter.

2. Iran’s Supreme Leader Ayatollah Ali Khamenei has ruled out negotiations with US President Donald Trump’s administration. Diplomats in the reformist government of President Masoud Pezeshkian had suggested in recent weeks that Iran could be open to talks aimed at reassuring the world that it is not seeking nuclear weapons. Najmeh Bozorgmehr in Tehran listened to Khamenei’s speech.

• More Middle East news: Donald Trump said the Gaza Strip would be turned over to the US by Israel only after fighting had ceased in the war-torn Palestinian territory and that no American troops would be needed to maintain stability.

3. Panama’s President José Raúl Mulino has rejected as “lies” a US statement that the Central American country has agreed to allow American warships to transit the Panama Canal free of charge. His comments came a day after the US state department said Panama’s government had agreed to stop charging fees for US government vessels passing through the strategic waterway. Here’s the latest on the growing diplomatic row.

4. India’s central bank has cut its benchmark interest rate for the first time in almost five years in an effort to shore up economic growth and reverse a broad downturn in the world’s most populous country. The decision to cut the headline repo rate by 0.25 percentage points to 6.25 per cent was unanimous. Read more on the Reserve Bank of India’s decision.

• More interest rate news: The Bank of England yesterday halved its 2025 growth estimate as it cut interest rates by a quarter-point to 4.5 per cent, in a blow to UK chancellor Rachel Reeves.

5. US dealmaking has suffered its worst start to a year in a decade after policy volatility following Donald Trump’s election and escalating rhetoric over tariffs put a sudden chill on activity. The overall number of US mergers and acquisitions collapsed nearly 30 per cent in January, according to LSEG data. Our deals reporting team has crunched the numbers.

How well did you keep up with the news this week? Take our quiz.

Today’s big read

It has been a turbulent week in US trade policy and the opening salvo of a new trade war has sent a chill through the Midwest — especially Iowa. In a state where hogs outnumber people seven to one, this week’s events have evoked painful memories of Trump’s first term when China responded to US tariffs by slapping 25 per cent levies on imports of US soyabeans, beef, pork, wheat, corn and sorghum. The prospect of another round of trade tensions comes with American farmers already in a tight spot.

We’re also reading and listening to . . . 

Chart of the day

Donald Trump’s new cryptocurrency has sparked a flood of imitators, leading to warnings that investors risk being duped. More than 700 copycat and spam coins have been sent to Trump’s digital wallet by people apparently seeking to suggest their creations have his endorsement, according to a Financial Times analysis. Members of Trump’s family who have not launched their own cryptocurrencies have also inspired unofficial coins, including Barron, Ivanka and Eric.

Take a break from the news . . . 

Do we prematurely dismiss people on the grounds that they are too old? Composer Leoš Janáček’s wrote his two most significant pieces of music when he was 74 and Vincent van Gogh at 28 was told “You are no artist . . . You started too late.” Tim Harford makes the case for ‘late bloomers’.