Google is now spending so much on AI that its cash flow has gone negative. The Fed held rates, but two of its members wanted a hike. China’s Communist Party just expelled a record 33 officials. Wall Street is paying to read Trump’s posts before you do. And the Milwaukee Brewers won their first World Series in 57 years. Five stories today, and what our guests have told me about each one.
Google is burning cash to build AI
Alphabet’s shares fell around 10% after hours on Wednesday. The company spent about $51 billion on capital expenditure in a single quarter, mostly AI data centres, and its free cash flow went negative, to roughly minus $9 billion. It also kept its 2026 spending forecast at $195 to $205 billion. Microsoft had a very different night: earnings beat expectations, its commercial order backlog jumped 73% to $677 billion, and it still made about $19 billion in free cash.
So is Big Tech overbuilding? I put that exact question to George Gilder about the fibre-optic boom of the nineties, when hundreds of telecom companies went bust. His answer: “It was a scandal of money that brought down those thousand telecom companies that went into debt in order to launch the fibre optic revolution, which I called the telecosm, and which really did transform our world economy. So I don’t think we overlaid fibre.”
▶ Watch George Gilder on the fibre boom from 1:33:33
The companies that laid the fibre didn’t all survive. The network they built runs the world. Watch who’s still standing when the AI build-out settles.
The Fed held, but a hike is coming
The Federal Reserve held rates at 3.75% to 4% on Wednesday, but the vote was 10 to 2: Governor Lisa Cook and Cleveland Fed President Beth Hammack both wanted a quarter-point hike. The statement said inflation “remains elevated” and the economy is growing “at a strong pace”. Markets now put the chance of a hike in December at around 80%.
Lyn Alden explained why raising rates is so much harder than it used to be: “When rates get that low, there’s a ton of debt to GDP, and then they can never raise rates because it would blow everything up… unlike, say, the ’70s, where Volcker was able to raise rates super high because debt as a percentage of GDP was very low.”
▶ Watch Lyn Alden on the debt trap from 29:29
If the Fed does hike in December, watch who struggles to pay the interest.
Xi’s record purge
China’s Communist Party closed its Fifth Plenum on Thursday by confirming a record 33 expulsions, including Zhang Youxia, once Xi Jinping’s top general. Only 162 of the 205 full Central Committee members attended, and “Xi Jinping Thought on Party Building” was written into the official communique. The next Party Congress, where Xi is expected to seek a fourth term, is set for the second half of 2027.
Hugo de Garis lived and worked in China for twelve years. He told me what changed: “In a sense the Chinese are roaring, well, until Xi Jinping came back to power, the new emperor… I left in 2018, good time to get out.”
▶ Watch Hugo de Garis on Xi’s China from 37:05
Purges this size leave very few people around Xi who can say no to him.
Wall Street is paying to read Trump’s posts first
Bloomberg, Jump Trading and Susquehanna have reportedly signed up for Trump Media’s “Truth API”, which delivers Truth Social posts from Trump and other accounts about 50 milliseconds before the public, for $60,000 to $100,000 a month. Democratic senators have asked the SEC to investigate. Trump’s family trust owns 41% of Trump Media.
Jon Najarian spent 25 years on the Chicago options floor and watched speed take over. “They were basically backing a whole bunch of quants to come up with algorithms and figure out if I can make this computer go just two ticks faster, I can beat you guys on the floor… I could make money for three weeks straight and they could take it away from me in one minute.”
▶ Watch Jon Najarian on high-speed trading from 1:00:08
Fifty milliseconds sounds like nothing. On a market-moving post, it’s everything.
The Brewers win it all
The Milwaukee Brewers beat the Tampa Bay Rays 4-1 in Game 5 to win the first World Series in their 57-year history. A small-market team went 11 and 2 through the postseason, and catcher William Contreras was named MVP.
James Clear played baseball all the way through college. He told me what really separates people at the top: “I would rather be an athlete that’s at like the 90th percentile of physical talent, but like the 95th of execution and habits than the other way around… once you get to the top of any field, everybody’s talented.”
▶ Watch James Clear on talent versus habits from 6:00
You don’t need the biggest budget to win. You need the best habits.
Tonight
Amazon reports after the US close, and everyone will be watching what it says about AI spending after Google’s numbers.
Which of these stories are you watching? Tell me on X at @brianbrose.
P.S. Google’s shareholders are paying for the AI build-out in public. The biggest gains in AI usually happen privately, before a company ever lists. That’s why our AI Investment Club meets founders and reviews deals before the IPO. And in Dubai, our Luxury Property Investment Circle buys dated villas in prime enclaves, rebuilds them and sells them, on a 12 to 16-month cycle.
This is commentary, not financial advice. Do your own research.
