#AI

OpenAI and major hyperscalers like Microsoft, Alphabet, Meta, and Amazon are significantly increasing capital expenditures to build AI infrastructure. This investment race, driven by the demands of generative AI, focuses on supercomputing data centers and Nvidia AI chips. Analysts project substantial capex growth, with total hyperscaler spending potentially reaching $550 billion next year. While these companies aim for AI dominance, they must balance investments with revenue growth and market expectations. Even Apple plans to increase AI spending, signaling a strategic shift.

OpenText launched its Content Cloud solutions for Guidewire, aiming to accelerate insurers’ cloud migration and provide AI-driven access to policy and claims data. Integrated with Guidewire’s PolicyCenter, ClaimCenter, and BillingCenter, these solutions embed content and AI into core workflows, reducing information search time and improving efficiency. Insurers are using OpenText to centralize content, streamline compliance, and unlock AI-driven insights. The solutions are available on the Guidewire Marketplace.

Tesla’s Board Chair urges shareholders to approve Elon Musk’s $1T compensation package, citing his vital role in the company’s future, particularly AI and robotics. The board argues that rejecting the package could devalue Tesla. ISS recommends against it, and the “Take Back Tesla” campaign raises ESG concerns. The vote includes board re-elections. The decision hinges on Musk’s continued vision and influence versus concerns over excessive compensation and potential brand damage. Increased voting power for Musk is also under consideration.

Super Micro Computer (SMCI) shares fell 6% after preliminary Q1 2026 results missed expectations, forecasting $5 billion revenue instead of $6-7 billion. The company attributes this to “design win upgrades” shifting revenue to Q2. Despite this, CEO Charles Liang anticipates strong customer demand and reiterated revenue of at least $33B for FY 2026, driven by AI market share gains. Recent design wins exceed $12 billion, set for Q2 delivery. A detailed update will be provided during the November 4 earnings call.

SAP is making a big push in enterprise AI, CEO Christian Klein cites AI as key to customer deals. Q3 cloud backlog surged 23% to €18.8B, showing demand for AI-infused cloud services. While Q3 revenue rose 7% to €9.08B, it slightly missed estimates. Deutsche Bank maintains a positive outlook, but SAP is guiding towards the lower end of its cloud revenue forecast. Klein emphasizes focusing on practical AI applications and value creation, stressing the importance of real-world adoption. SAP aims to transform into an AI-first entity.

Key morning headlines: Tesla’s earnings disappointed, prioritizing robotaxis and AI, triggering a share drop. Southwest Airlines and American Airlines reported strong earnings, contrasting Tesla’s struggles. The US imposed sanctions on Russian oil giants, causing prices to surge. Meta is cutting AI jobs amid superintelligence concerns. Starbucks workers are preparing for a strike vote over pay and working conditions, potentially impacting upcoming earnings.

Reddit has sued AI search engine Perplexity, data scraping service Oxylabs, AWMProxy, and SerpApi, alleging unauthorized scraping of user-generated content to train AI models. Reddit claims Perplexity illegally used its data, while Perplexity denies training models on Reddit content and accuses Reddit of “extortion.” This lawsuit, following a similar one against Anthropic, underscores the escalating battle over data rights in the AI era and the growing tension between content platforms and AI developers. The case could set precedents for data licensing and AI training practices.

AI investments and acquisitions are increasingly followed by layoffs in the tech industry. Companies like Accenture, Meta, and HP, after investing in or acquiring AI startups like Snorkel AI, Scale AI, Windsurf and Humane, subsequently reduced workforce. This trend reflects a shift from prioritizing startup culture to rapidly optimizing for ROI and eliminating overlapping roles. While AI advancements may create new jobs, the immediate impact involves workforce restructuring, potentially impacting talent attraction and demanding greater employee protections related to acquisitions. The industry is aggressively recruiting in core AI roles despite overall reductions.

Netflix’s Q3 earnings missed expectations due to a Brazilian tax dispute, although revenue met forecasts. Despite this, analysts foresee continued streaming dominance, fueled by hits like “KPop Demon Hunters.” Legacy media companies like Warner Bros. Discovery and Comcast’s NBCUniversal are evolving. India may reduce oil purchases from Russia for a trade deal with the U.S., while Japan’s exports show recovery signs. UK conglomerates are declining, contrasting with the U.S. model.

Meta Platforms and Blue Owl Capital have formed a $27 billion joint venture to finance Meta’s “Hyperion” data center project in Louisiana. Blue Owl holds an 80% stake, providing $7 billion in cash, while Meta retains 20% and manages construction. Hyperion, Meta’s largest data center, will support its growing AI initiatives. The Louisiana facility, slated for completion by 2030, could consume twice the electricity of New Orleans at peak demand. This deal mirrors a broader trend of tech giants investing heavily in AI infrastructure.