AI Drives Record $800B Hyperscaler Spending

Key Takeaways

• Corporate profits hit a record $4.7 trillion in Q2, driven by AI investment
• Goldman Sachs expects AI spending by hyperscalers to reach $1.4 trillion by 2028
• S&P 500 Q3 EPS forecast rises 29 percent, far above the 30-year average of 7 percent
• U.S. data center investment may exceed $10 trillion through 2032

Corporate Profits Hit Record Highs Driven by AI Investment

Corporate profits reached a record $4.7 trillion in the second quarter, driven by heavy investment in AI. Third quarter earnings per share for the S&P 500 are expected to rise 29 percent. Goldman Sachs says AI investment is responsible for almost half of the S&P growth in 2026. The bank expects AI spending by hyperscalers to reach $1.4 trillion by 2028.

US Banks Report Higher Profits from AI and Consumer Spending

Four major US banks reported stronger earnings in the third quarter. JPMorgan Chase earned $15.3 billion but missed analyst forecasts. Goldman Sachs saw a 72 percent jump in equities revenue. Citigroup profits rose 40 percent and Wells Fargo earned $5.95 billion. Banks say consumer spending and business investment remain strong despite inflation and rising rates.

Record Corporate Profits Driven by AI Spending Surge

Corporate profits hit an all-time record of over $4.7 trillion in the second quarter due to AI investment. The 51 percent earnings growth far exceeds the historical average of 7 percent over 30 years. Goldman Sachs expects AI earnings boosts to gradually fade as productivity gains become more important. Hyperscalers plan to spend $800 billion on capital expenditures this year.

Big US Banks Stay Bullish on AI Despite Public Concerns

Major US banks reported strong third quarter profits and expressed confidence in the AI investment boom. JPMorgan Chase earned $15.3 billion while Goldman Sachs profits reached $5.1 billion. Goldman CEO David Solomon called this a very strong technology super cycle. Bankers say concerns about AI risks have not slowed down spending on AI projects.

US Banks Report Strong Earnings and AI Optimism

JPMorgan Chase and Goldman Sachs reported higher third quarter profits driven by trading and advisory revenues. JPMorgan profits rose 6 percent year over year to $15.3 billion. Goldman Sachs saw equities trading revenue jump 72 percent. Bank executives say the AI investment boom continues strong despite public worries about job loss and data center impacts on energy and water supplies.

Goldman Sachs CEO Warns AI Boom Faces Trillion-Dollar Financing Test

Goldman Sachs CEO David Solomon discussed AI and electronic trading opportunities during the third-quarter earnings call. He warned that massive AI infrastructure financing could pressure borrowing costs and threaten some projects. U.S. data center investment may exceed $10 trillion through 2032. Solomon said demand for computing capacity still outpaces supply. The firm also raised its alternative-investment fundraising target from $75 billion to $150 billion.

Aflac Partners with bswift on AI Benefits Tools as Investors Weigh Valuation

Aflac became the exclusive launch partner for bswift's new AI powered carrier configuration toolset. The tool aims to streamline complex benefit plan updates for clients and distribution partners. Aflac's stock rose 3.12% over one week and 5.13% year to date. The company's fair value is estimated at $118.53, slightly above its last close of $115.89. Aflac is also pushing sales of Tsumitasu savings products in Japan.

Meta Platforms Could Be 25% Undervalued as Muse AI Models Gain Traction

Meta Platforms launched its Muse Wonder and Muse Wonder Full AI models, drawing fresh Wall Street attention. The stock has a 30-day return of 17.66% and a year-to-date gain of 17.23%. Meta's fair value is estimated at $1,018.71 against a last close of $762.50, suggesting it may be undervalued. However, the stock trades at 28.5x earnings, above the peer average of 27x. Heavy capital spending and Reality Labs losses remain key risks.

Oracle May Be Undervalued Despite AI Cloud Growth and Cash Flow Concerns

Oracle faces investor concern over weak free cash flow despite surging AI infrastructure revenue. The company reported a US$664 billion backlog. Its share price fell about 8.6% over the past month and is down 29.8% year to date. Oracle's fair value is estimated at $192.59 compared with a last close of $137.39, suggesting the stock may be undervalued. Rising debt costs and negative free cash flow remain major concerns.

Lakeland Police Roll Out $21 Million Tech Upgrade with Drones and AI

Lakeland police are launching a $21 million technology upgrade over 10 years. Three autonomous drones will station on city rooftops to provide real-time video feeds before officers arrive. Body cameras will translate more than 60 languages in real time. The department will also use AI-generated police reports that officers must review for errors. Grants will cover most costs, so local taxpayers will not see additional charges.

San Diego considers AI tools to speed up police report writing

The San Diego Police Department is looking for an AI program to help officers write reports faster. The department issued a request for information on July 31 to explore available technology. The estimated contract value ranges from $500,000 to $3 million. Spokesperson Ashley Nicholes said the department is in an exploration phase due to staffing shortages. Other agencies like LAPD and Chula Vista already use AI tools for similar tasks.

UN report says AI accountability is everyone's shared duty

A United Nations article argues that the future of AI must be a shared responsibility. The piece calls for global collaboration to make AI more accountable, sustainable, and just. It stresses the need to prioritize transparency, explainability, and fairness in AI development. The article states that AI should respect human rights and benefit all people, not just a select few.

ONLYOFFICE 10.0 adds AI tools and stronger security features

ONLYOFFICE released version 10.0 of its open-source office suite with around 50 new features. The update adds context-aware AI tools to document, spreadsheet, presentation, and PDF editors for tasks like summarizing and translating. It also introduces four free modular Apps including AI Agents and Forms. The release fixes 35 vulnerabilities to improve security for organizations handling sensitive data.

Anthony Pompliano analyzes AI market expectations and tech stocks

Anthony Pompliano, Chairman and CEO of Silvia, appeared on 'Big Money in the Morning' to discuss AI market expectations. He analyzed warnings from Broadcom's CEO comparing AI investing to gambling. The conversation also covered Silvia Inc.'s pre-market stock performance and the shift from speculative trading to sustainable growth in tech stocks.

Toptal launches ExpertCrowd to train AI with vetted experts

Toptal launched ExpertCrowd, a platform that connects organizations with specialized domain experts to train and improve AI models. The platform taps into a network of over 30,000 experts across 140 countries, including 2,000 AI specialists and 1,000 PhD-level AI experts. Before its official launch, ExpertCrowd generated over $5 million in recurring revenue from work with frontier labs and companies like Scale AI. Toptal also released a new Frontier SWE Benchmark to evaluate AI model performance.

The AI funding loop that could become a bubble

Companies like Nvidia, OpenAI, Microsoft and Amazon use circular financing where they act as investor, supplier and customer at the same time. Nvidia invested in Firmus Technologies, which plans to build data centres using Nvidia's DSX chips and also became a Nvidia customer in Indonesia. The Reserve Bank of Australia warned that this opaque funding method could signal an AI bubble similar to the 1990s telecom boom. Nearly 90% of Australian households have super fund exposure to the US stock market, making them vulnerable if the bubble bursts.

OpenAI used AI to catch a corporate spy

OpenAI discovered a suspicious recording device during a security sweep on September 30 that was monitoring audio and transferring data using encryption. The company used its own AI models to analyze forensic images of the device and data changes, which helped identify a suspect who had been working in product since July. OpenAI handed the evidence to the FBI, leading to an arrest on October 9. The company stated the employee was terminated and there were no signs of them accessing model weights, source code or customer data.

Legal battles over AI and copyright

As AI technology advances, creators and AI companies are facing legal disputes over how copyrighted material can be used in AI systems. The growing use of AI-generated content has raised important questions about who owns the rights to material produced by AI. Some believe the AI system creators should hold the rights while others believe the original human creator should. These cases present new challenges that the legal system must address as AI becomes more common.

Sources

• Corporate Profits Soared Fueled By AI Investment As Markets Gear Up For Q3 Earnings
• US Banks Post Higher Profits as AI Investment and Consumer Spending Drive Resilience
• Corporate Profits Soared Fueled By AI Investment As Markets Gear Up For Q3 Earnings
• Big US banks report strong earnings and stay bullish on AI
• Big US banks report strong earnings and stay bullish on AI
• AI Boom Faces a Trillion-Dollar Financing Test, Goldman Sachs CEO Warns
• Aflac (AFL) Partners On AI Benefits Tools, Does The Stock Look Fully Valued?
• Meta Platforms (META) Could Be 25% Undervalued After Muse AI Gains Traction
• Is Oracle (ORCL) Undervalued After AI Cloud Growth Met Cash Flow Concerns?
• Lakeland police tech expansion: Rooftop drones, AI reporting and translation-capable body cameras
• San Diego looks at using AI to help officers write police reports
• The Future of AI Is Everyone’s Responsibility
• ONLYOFFICE 10.0 brings AI tools, modular apps, and stronger security to its open-source office suite
• AI expectations, big tech stocks analyzed by Anthony Pompliano
• Toptal Launches ExpertCrowd to Train AI with Vetted Domain Experts, Releases Frontier SWE Benchmark
• Who’s paying whom? The circular money machine behind the AI boom (or bubble)
• Here's How OpenAI Says It Used AI to Find a Spy Inside Its Company
• The Questions AI Copyright Cases Need to Answer