01/05/2026

FRIDAY | MAY 1, 2026

17

BIZ & FINANCE

Alphabet soars as Meta stumbles over AI costs

Powell to stay as a Fed governor after term as chairman ends WASHINGTON: US Federal Reserve chief Jerome Powell said on Wednesday that he would stay at the central bank as a governor after his term as chairman concludes, as the independent institution battles legal challenges under Donald Trump’s administration. “After my term as chair ends on May 15, I will continue to serve as a governor for a period of time to be determined,“ Powell told a news conference after heading his last policy meeting. He stressed that his decision had nothing to do with verbal criticism by elected officials, instead citing unprecedented legal action that Trump’s administration has taken against the Fed. “I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors,“ Powell said. He added that he plans to “keep a low profile as a governor” and will leave when he deems it appropriate, in an unusual though not unprecedented move. He can remain as a Fed governor until 2028. US Treasury Secretary Scott Bessent criticized Powell’s decision on Fox Business . He called it “a violation of all Federal Reserve norms” and “an insult to Kevin Warsh,“ who is expected to be the next central bank chief. Since returning to power last year, Trump has frequently slammed Powell for not cutting interest rates more quickly, a policy that would boost economic activity but could fuel inflation. The president separately attempted to oust Fed governor Lisa Cook over mortgage fraud allegations, in a case that now stands before the Supreme Court. His Justice Department meanwhile opened a criminal probe into Powell and the Fed over renovation cost overruns, a move the central banker called a tactic to erode the Fed’s independence. The Justice Department has dropped that investigation for now, and the Fed chief said he was encouraged by recent developments – although monitoring the remaining steps. He reiterated that he would not leave the Fed until the probe is“well and truly over“, emphasising the need for a central bank that operates “free of political influence”. – AFP

o Amazon reports sharp rise in profit as investment in Anthropic supercharges bottom line SAN FRANCISCO: Google-parent Alphabet impressed Wall Street with its latest quarterly earnings on Wednesday, as big tech rival Meta left investors lukewarm amid concerns about the huge cost of AI development. The earnings – along with reports from Microsoft and Amazon – came as AI titans pump billions of dollars into cloud computing and artificial intelligence, vying to lead in technology that they insist will transform all aspects of life. Shares in Alphabet rose by more than 6% in after-hours trading as investors lauded the company’s success in making the pivot to AI and solid revenue across its major divisions. The tech giant reported a profit of US$62.6 billion on revenue just shy of US$110 billion, easily eclipsing the same period a year earlier and beating market expectations. Shares of Alphabet, maker of Gemini AI, have risen 26% in the past six months while rivals Meta and Microsoft have watched their shares dive nearly 11% and 22% respectively in the same period. “Alphabet remains one of the top names in the AI Revolution given the vertically integrated approach across Search, YouTube, and its ad cohort which continues to accelerate,” said Dan Ives of Wedbush Securities. Social media behemoth Meta, which rivals Google for advertising revenue, meanwhile saw its shares slide by more than 6%, despite topping earnings expectations for the recently ended quarter. Meta sent tremors through its results by announcing that expenses at the tech giant notched up to US$33.4 billion as it chases “superintelligence”, including a hiring spree for top AI talent. Meta also increased its projected capital spending – mainly for data centres – for the year by US$10 billion, to a new range of US$125 billion to US$145 billion. The company reported a profit of US$26.8 billion on revenue of US$56.3 billion in the quarter. AI investments from the company that owns Instagram and Facebook are not directly tied to a revenue stream as with Amazon, Microsoft and Google, which sell AI capabilities to cloud clients. Meta has moved to rein in costs to help fund its AI ambitions, announcing last week

Britain’s King Charles speaks with Nvidia CEO Jensen Huang, Amazon founder Jeff Bezos and AMD President Lisa Su during a meeting with chief executives from the technology industry at Blair House in Washington. – REUTERSPIC

or quarter – and extrapolates it out to a full year. But the company founded by Bill Gates saw its shares drop by more than 2% after its earnings post, before seeing that loss largely erased. Microsoft’s stock was down about 12% this year through Wednesday’s close. Amazon meanwhile reported a sharp rise in first-quarter profit, saying that its investment in artificial intelligence startup Anthropic supercharged the bottom line. The Seattle-based e-commerce and technology colossus said net profit jumped to US$30.3 billion in the three months ended March 31, nearly doubling from US$17.1 billion a year earlier. Amazon has struck deals with OpenAI and Anthropic that commit the two AI labs to spend more than US$100 billion on AWS cloud services in the coming years. Amazon shares rose more than 4% in after-hours trading. – AFP

that it would cut roughly 8,000 jobs and leave 6,000 open roles unfilled. While investors are wary of whether spending fortunes on AI is financially shrewd, companies insist it is justified by seemingly insatiable demand, a position Wall Street mostly supports even if shares in some of the tech giants have struggled in recent months. Microsoft also reported quarterly revenue and earnings ahead of Wall Street expectations Wednesday, powered by demand for cloud computing and artificial intelligence services. The tech giant posted revenue of US$82.9 billion for the quarter ended March 31, up 18% from a year earlier and topping analyst consensus forecasts. Net income climbed 23% to US$31.8 billion. CEO Satya Nadella said Microsoft’s AI business has surpassed a US$37 billion annual revenue run rate, a figure that takes a recent period’s revenue – typically a month

Volkswagen warns future at risk without more cost cuts FRANKFURT: Volkswagen’s future is at risk without further cost-cuts, the ailing German auto giant warned yesterday after profits plunged more than feared as headwinds mount. The carmaker is struggling with Chinese competition, US tariffs and patchy demand for electric vehicles, and already has plans to axe 50,000 jobs across all its brands in Germany by 2030. “We need to fundamentally change our business model and achieve structural, sustainable improvements – in all areas and at all levels. If we fail to do that, we will jeopardise our future.” VW, whose 10 brands range from Audio to Seat and Skoda, would have to adjust its capacity and “work on further optimising costs at our plants”, he said. Antlitz also said that US President Donald Trump’s tariffs, introduced a year ago, were burdening the group with an extra four billion euros in costs annually. Volkswagen delivered just over two million vehicles in the first quarter, down four percent from a year earlier. Overall deliveries slid 15% in China, with deliveries of EVs down 64%. Deliveries were down 13% in North America.

they cannot be reliably assessed, Volkswagen said. The woes of Volkswagen, one of Germany’s best known companies, reflect a broader malaise in Europe’s biggest economy, particularly among its traditional manufacturers. The company’s annual profits slid to their lowest level in almost a decade in 2025. CEO Oliver Blume said yesterday Volkswagen needed to align its strategy to a new world that was “undergoing fundamental change”. “Wars, geopolitical tensions, trade barriers, tighter regulation, and intense competition are creating headwinds,“ he said. – AFP

Chinese automakers were not just competing on their home turf but also gaining market share in Europe, he warned. Carmakers like BYD have emerged as fierce rivals to Volkswagen in China, traditionally a key source of profits for the German manufacturer, particularly when it comes to EVs.

From January to March, the group’s net profit slid 28% to €1.56 billion (RM7.15 billion) and revenues dropped to €76 billion, worse than analyst forecasts. “The cost reductions planned so far are not enough,“ said VW chief financial officer Arno Antlitz.

The group is forecasting sales to grow between zero and 3% in 2026, and for its core profit margin to come in between 4% and 5.5%. Possible impacts of the war in the Middle East were not included in the forecasts, as