Andrew here. Usually, investors hate when companies announce huge spending plans. That’s why it has been so wild to see them cheer as Microsoft and Meta announced mammoth new artificial intelligence investments.
The more they spend, the higher their stocks seem to go. Microsoft raised its suggested annual outlay to $120 billion — up from an originally mind-bending forecast of $80 billion. Such spending helps prop up much of the economy — the semiconductor industry and all of its component parts, as well as the energy industry, the real estate business and more. More below.
Big spenders
It wasn’t too long ago that investors were worried that tech giants were spending too much on artificial intelligence. The rapturous responses to Meta’s and Microsoft’s latest earnings reports show that Wall Street is now fully on board.
Microsoft appears poised to enter the $4 trillion market capitalization club on Thursday, joining the chipmaker Nvidia. Shares in Meta are up over 11 percent. That’s despite both companies reporting heavy investment in A.I. infrastructure — though it helps that they each reported blowout quarters.
The numbers are staggering:
-
Meta said that capital expenditures — which these days largely means spending on A.I. data centers — could reach up to $72 billion this year.
-
Microsoft said it planned to spend $30 billion on capex in the current quarter alone.
Both reports come after similarly big commitments disclosed last week by Alphabet, Google’s parent company.
Executives say this is only the beginning. Meta implied that spending in 2026 could hit $100 billion. And Mark Zuckerberg, the company’s C.E.O., outlined an expansive plan for what he calls A.I. “personal superintelligence” that will bolster its core businesses. Building that, he suggested, justified the wallet-busting compensation Meta is offering A.I. engineers.
For its part, Microsoft suggested it could go up to $120 billion in the 2026 fiscal year.
Investors seem to have accepted that the A.I. race is expensive. Consider, for instance, that OpenAI is now privately claiming to have 700 million weekly active users for its ChatGPT services, up from 500 million in late March. That kind of explosive growth is partly why the company expects to burn through $8 billion this year.
Anthropic, another A.I. rival, is said to be in the process of raising as much as $5 billion as it, too, faces high costs.
But there’s an extremely high bar. Microsoft reported a 24 percent jump in quarterly profit, to $27.2 billion. Meta’s quarterly earnings were up 36 percent, at $18.3 billion.
Amy Hood, Microsoft’s C.F.O., justified her company’s enormous expenditures by saying it was “correlated” with business demand. If that equation goes askew for these tech giants, investors’ patience may wear thin.
-
In other A.I. news: China’s internet regulator summoned Nvidia executives to explain “backdoor security risks” associated with chips developed for the Chinese market.
HERE’S WHAT’S HAPPENING
U.S. copper prices plunge. Futures prices dropped a record amount on Wednesday after the Trump administration announced a plan to impose a 50 percent tariff on certain copper imports — but made exemptions for refined copper. Industry trade groups welcomed the exclusion, though the carve-out has again upended global prices for the metal, which is crucial for many manufacturers.
Kamala Harris won’t run for California governor. The former vice president’s announcement ends months of speculation about efforts for a political comeback in her home state, but opens the door for a potential presidential run in 2028. Separately, Texas’ Republican-controlled Legislature on Wednesday introduced an aggressively redrawn map for House districts that, if approved, could flip Democratic seats in the 2026 midterm elections.
Treasury Secretary Scott Bessent wades into the Social Security privatization debate. Bessent said on Wednesday at an event that so-called Trump accounts for children, created as part of Republicans’ tax-and-spending law, could be viewed as a “back door” for eventually withdrawing the government from funding the safety net for retirees. Bessent later clarified that the administration would protect the program.
When will the Fed cut?
Markets on Thursday seem to be largely on board with the Fed’s decision to hold steady on interest rates, as Jay Powell, the central bank’s chair, continued to beat back pressure from President Trump (and from some Fed governors) to go lower.
That said, Powell’s remarks on Wednesday at a news conference surprised many Fed watchers. He “was much more hawkish than we were expecting,” Aditya Bhave, an economist at Bank of America, wrote in a research note. “He made it clear that the onus is on the data to justify a September cut,” Bhave added.
Watch Thursday’s Personal Consumption Expenditures index update and Friday’s jobs report, part of a wave of data that could influence the central bank’s next move. Second-quarter G.D.P. data, published on Wednesday, showed softer growth as companies pull back on spending on buildings and equipment. On the flip side, Powell saw a “solid” labor market.
The Fed chair didn’t rule out a September cut. But he added that he was watching for fallout from Trump’s trade war and its effect on inflation and growth. Tariffs “have begun to show through more clearly to prices of some goods,” he said, “but their overall effects on economic activity and inflation remain to be seen.”
A flurry of new trade deals — with South Korea, Thailand and Cambodia have been announced over the past few hours — could lift some of that uncertainty. But tensions appear to be rising with Brazil, Canada and India.
Trump castigated Powell on Thursday. On Truth Social, he called him a “TOTAL LOSER” and his move too late, saying it would cost the “Country TRILLIONS OF DOLLARS.” The futures market, however, now sees roughly one cut this year, down from two before Wednesday’s news conference.
Wall Street economists are split: RBC Capital Markets sees no cuts this year, while Goldman Sachs forecasts three, beginning in September.
Divisions are forming within the Fed, too. Two Trump-appointed governors, Christopher Waller and Michelle Bowman, supported cutting the benchmark rate by a quarter of a percentage point. Such public dissent by rate-setting officials has been somewhat rare in recent years, but was widely expected as Trump continues to pressure Powell to cut — or resign.
Is the Fed’s independence in jeopardy? Investors have largely looked past Trump’s attacks. But “what could destabilize things are if there are more specific threats of kicking Powell out, accusations of malfeasance or corruption,” Kara Murphy, chief investment officer at Kestra Investment Management, told DealBook.
A second act for Figma, and I.P.O.s
Figma appears headed for a promising start for life as a publicly traded company on Thursday, after the design software maker priced its I.P.O. above already heightened expectations.
Its offering is a comeback for the company after it abandoned efforts to sell itself to Adobe in 2023 — and reflects an improving picture for I.P.O.s, Michael de la Merced writes.
Figma is now valued at $19.3 billion, after it priced its offering at $33 a share, a dollar above an already raised price range.
That’s not far off from the $20 billion that Adobe had offered to pay for the company in 2022. That deal was eventually dropped amid opposition from antitrust regulators in three jurisdictions. Danny Rimer, the Index Ventures partner who sits on Figma’s board, told DealBook that the company felt “frustration” over regulators incorrectly determining that Adobe and Figma were direct competitors.
The offering will mint fortunes for many in the Figma orbit, including:
-
Dylan Field, the company’s co-founder and C.E.O., who sold $77.5 million worth of stock in the offering and whose remaining shares are valued at nearly $1.8 billion
-
Index Ventures, which is selling $108 million worth of stock and holding onto $2 billion worth. (For reference, DealBook hears that the firm had invested $50 million to $100 million in the company.)
-
Greylock Ventures, whose stake is now worth $1.9 billion
Rimer told DealBook that his firm’s investment grew out of a conviction that the company’s software would help democratize design — and that Field would be a “transformational” founder. (Rimer first met Field when he was a 19-year-old intern at Flipboard.)
It’s also more good news for the I.P.O. market, which has been picking up after a yearslong lull. Figma’s offering is the biggest of 2025 to date, and part of a wave of offerings hitting the markets as tariff-related turmoil largely subsides.
Where things stand, according to Renaissance Capital:
-
122 offerings have been priced in the U.S. so far this year, up 47 percent year-on-year
-
139 offerings have been filed, up nearly 21 percent
-
But the I.P.O. haul has been smaller than in 2024, with $19.6 billion in proceeds, down 15 percent year-on-year
If Figma’s offering trades well, that could persuade more companies — including Klarna and StubHub — to test the waters as well.
Hot Take: Sports teams should sell tickets on the blockchain
Our weekly series “Hot Take” explores out-of-the-box ideas.
John Wu, the president of the Andreessen Horowitz-funded Ava Labs, thinks event ticketing is “filled with middlemen, hidden fees and fraud,” as well as “scalping, bots and resale pricing,” he said. Part of the problem is a lack of viable alternatives: Sports leagues and teams typically don’t have the infrastructure to securely sell tickets on their own, so they rely on intermediaries.
Wu’s solution? A blockchain platform that would allow leagues and entertainment companies to sell digital, verifiable tickets directly to fans. Ava Labs, in conjunction with the rewards platform Uptop, is already working with the Detroit Pistons and the Cleveland Cavaliers to put loyalty programs on the blockchain. But Wu’s ultimate vision is to also handle ticketing for teams. Start-ups like Chiliz are pitching similar ideas. “Blockchain brings transparency, control and accountability into the process,” Wu told Calum Marsh, a DealBook contributor.
How it would work: A digital ledger could prevent — or at least discourage — scalping, because it would trace the sale history and price of a ticket. Attributed as tokens, the tickets would be stored on the blockchain, providing an added layer of security.
Wu said his goal was to eventually make such blockchain ticketing tech more user-friendly. “People shouldn’t have to understand blockchain to benefit from it,” he said.
Is it feasible? DealBook asked Wayne Kimmel, a sports tech venture capitalist and a managing partner at SeventySix Capital. He liked the idea: “The pressure is growing from fans and creators alike to deliver better value, reduce fraud and build deeper connections,” he said. (SeventySix Capital is an investor in ZATAP, which embeds tickets through QR codes into merchandise like shirts and scarves.)
But Wu doesn’t think the road to blockchain ticketing will be easy, mostly because established ticket platforms are so prevalent. “Large incumbents like Ticketmaster still control massive distribution,” he said, “and that won’t go away overnight.”
THE SPEED READ
Deals
-
KKR bought control of HealthCare Royalty Partners, pushing into the pharmaceuticals royalty sector. The private equity giant also took a minority stake in Harley-Davidson’s finance division. (WSJ, Bloomberg)
-
The activist investor Ancora Holdings Group has taken a stake in the rail operator CSX, as this week’s railroad megadeal prompts speculation about further consolidation. (CNBC)
Politics, policy and regulation
-
A Senate committee advanced a bill that would bar stock trading by members of Congress, the president and the vice president — with a divestment exemption for President Trump. (NYT)
-
The Bureau of Labor Statistics raised concerns about whether cutbacks were hampering its ability to collect economic data used by Fed policymakers and for calculating Social Security benefits. (NYT)
Best of the rest
-
“Trump and Dimon Are Talking Again After Yearslong Rift” (WSJ)
-
Americans are snapping up multimillion-dollar London houses, taking advantage of falling prices: “This is an extraordinary buyer’s market,” one buying agent said. (WSJ)
We’d like your feedback! Please email thoughts and suggestions to [email protected].
Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
Sarah Kessler is the weekend edition editor of the DealBook newsletter and writes features on business.
Michael J. de la Merced has covered global business and finance news for The Times since 2006.
Danielle Kaye is a Times reporter, covering business and policy for the DealBook newsletter.
The post Investors Cheer an A.I. Spending Bonanza appeared first on New York Times.
