Business

Amazon Moves To Join Tech Giant Google, Others In Spending Surge As AI Race Heats Up

Published

6 months ago

August 1, 2024

Amazon.com is expected to join Google and Microsoft on Thursday in reporting a surge in capital spending on artificial intelligence as Big Tech companies rush to capitalize on the booming technology.

The e-commerce giant’s capital investments – mostly for building cloud and generative AI infrastructure – is expected to have risen 43% in the second quarter to $16.41 billion, according to LSEG data. That represents a roughly $1.5 billion increase from the previous three months.

The steep spending is also expected to pressure Amazon’s margins, outweighing benefits from cost cuts and supply chain efficiencies that are aiding the retail unit’s profitability.

The company’s Amazon Web Services (AWS) business has long dominated the cloud-computing market but it has been facing tough competition from Microsoft in recent quarters after the Windows maker rolled out AI-powered services to its Azure cloud business.

In response, Amazon has partnered with the likes of Anthropic and offered startups free credits that cover the cost of using major AI models to boost the market share of its AI platform Bedrock. It also named a new head for the AWS unit in May.

Microsoft and Google-parent Alphabet also said earlier this month they would plough ahead with investments even as the payoff from AI takes longer than some investors had hoped. This knocked Big Tech stocks whose valuations have soared this year on the promise of AI.

“Amazon’s capex spend will certainly be scrutinized closely. It has been slow on the adoption of AI and is skewed towards smaller companies which have struggled in the high interest-rate environment,” said Ben Barringer, analyst at Quilter Cheviot.

“We would expect AWS to start speeding things up in its AI development going forward.”

Amazon shares have risen about 23% this year. The stock has shed more than 6% since July 8, when it hit a record, part of a broader market selloff led by U.S. Megacaps.

Growth at AWS is likely to have stayed similar to the previous quarter at just over 17%, according to LSEG data. But, Morgan Stanley analysts said: “AWS needs to grow 18%+ in order to … ensure investors of AWS’s (AI) positioning and its ability to generate high-teens growth through this heavy capex investment period.”

As a result of the spending increase, Amazon’s gross profit margin growth is expected to have slowed to 1.3% in the April-June quarter, compared with 2.6% in the previous quarter and an average of 2.7% over the past two years.

Business

FCMB, Proparco Partner to Boost Women-Led Businesses, Agriculture

Published

18 hours ago

January 23, 2025

Samson Adeyanju

By Our Correspondent

First City Monument Bank (FCMB), and Proparco have strengthened their partnership with a $35 million senior credit line and two guarantees—ARIZ (€3 million) and EURIZ (€6 million)—signed on January 20, 2025.

The deal, facilitated under the European Union’s EFSD programme, aims to empower small and medium enterprises (SMEs), with a focus on agriculture (90%) and women-led businesses (10%).

This initiative enhances FCMB’s role as a leading SME bank in Nigeria and aligns with global development goals, such as SDG 2 (Zero Hunger) and SDG 8 (Decent Work and Economic Growth). The funding will support high-impact sectors, including agriculture and renewable energy, fostering job creation and economic progress.

Proparco Deputy CEO Djalal Khimdjee emphasized the partnership’s impact: “This collaboration enables the growth of SMEs, advances gender equality, and strengthens food security in Nigeria, building a sustainable and resilient economy.”

Since 2014, Proparco has supported FCMB in advancing Nigeria’s economic development. This latest collaboration reaffirms both institutions’ commitment to inclusive growth and sustainable economic transformation.

Business

Cardoso Vows to End Buying, Selling of Naira Notes

Published

2 days ago

January 22, 2025

Samson Adeyanju

By Our Correspondent

Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, has pledged decisive action to end the commoditization of the Naira, which has become prevalent across the country.

Speaking at the inaugural Stakeholders’ Conference of the Committee of Heads of Banks Operations (CHBO), in Lagos, themed “Commoditization of Naira: The Way Forward,” Cardoso, represented by his Senior Special Adviser, Fatai Kareem, described the practice as a grave threat to Nigeria’s financial system and economic stability.

He noted that the Naira, beyond being a currency, represents the nation’s identity and its stability is essential for economic growth.

However, the growing trend of treating the Naira as a commodity undermines its role as a medium of exchange.

Cardoso highlighted strategies to combat the issue, including public awareness campaigns on responsible currency use, enhancing cash management systems to ensure fair distribution, enforcing regulations against offenders, and promoting digital payment systems to reduce cash dependency.

Chairman of CHBO, Abraham Aziegbe, attributed the commoditization of the Naira to cash shortages in recent years, which forced Nigerians to pay premiums for transactions.

He emphasized the need for robust measures to address cash scarcity and prevent hoarding by financial institutions.

Business

Abuja BDC Denies Money Laundering, Terrorism Financing Allegations

Published

2 weeks ago

January 13, 2025

Samson Adeyanju

By Emmanuel Ogbodo
Abdullahi Abubakar Dauran, outgoing chairman of the Wuse Zone 4 Bureau de Change (BDC), merchants association, has dismissed allegations that the group is involved in money laundering and terrorism financing.
Dauran described the claims as baseless, emphasizing that the association operates within Nigeria’s financial laws.
He also refuted reports suggesting the formation of a parallel BDC group, calling them fabrications.
He urged the public to disregard the allegations and warned The Nation and The Independent newspapers to retract their reports within 48 hours or face legal action.