Morning Brew Daily The Fed Slashes Rates Again & Big Tech’s Endless AI Spending
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Oct 30, 2025 Big tech companies are ramping up AI investments, with Microsoft doubling its data center footprint and Alphabet hitting $100 billion in revenue. The Fed has cut rates for a second time this year while halting balance sheet shrinkage, causing market uncertainty. A controversial Netflix film challenges the Pentagon over missile defense portrayal. On a lighter note, trends in the fried chicken wars highlight a preference for boneless options, while AI's rise is impacting the animal acting industry. Lastly, many Americans feel guilty for not taking vacation time.
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Big Tech's AI Spending Surge
- Big tech is massively ramping capital expenditures to meet surging AI infrastructure demand.
- Google, Meta, and Microsoft are betting heavily on compute to power future AI revenue streams.
Different Risks For Meta Versus Cloud Leaders
- Investors worry about ROI as Meta pours billions into AI without a cloud business to monetize it.
- Microsoft and Google face less anxiety because their cloud and search units already generate massive cash flows.
Watch Powell's Tone, Not Just The Vote
- Expect cautious Fed moves when labor data is incomplete due to the government shutdown.
- Monitor Fed language closely because Powell's tone can rapidly change rate-cut expectations.