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Alphabet shares sink after cloud growth stalls and spending surges

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Alphabet shares sink after cloud growth stalls and spending surges

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Alphabet shares dropped sharply after slowing growth in the Google parent’s cloud business and plans to spend $75bn this year on building capacity for artificial intelligence products unnerved investors.

Alphabet late on Tuesday reported double-digit increases in fourth-quarter revenues and profits, driven by its core advertising business. But investors homed in on a disappointing quarter for its vast cloud unit, which runs Google’s data centres.

The cloud division posted a 30 per cent increase in revenues to almost $12bn, but this was slower than the 35 per cent growth rate in the previous three months, and below the $12.2bn analysts had forecast. Chief financial officer Anat Ashkenazi blamed this on “more demand than we had available capacity”.

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However, the scale of Google’s AI-related spending to meet this demand surprised the market. Fourth-quarter capital expenditure jumped to $14.3bn, up from $11bn last year and exceeding expectations for $13.2bn.

Google’s chief executive Sundar Pichai said spending on data centres and servers would accelerate to $75bn this year, up from $53bn in 2024 and a third more than Wall Street had estimated.

“The cost of actually using [AI] is going to keep coming down, which will make more extraordinary use cases feasible,” Pichai said, denying that the company was spending profligately. “That’s the opportunity space. It’s as big as it comes, and that’s why you’re seeing us invest to meet that moment.”

Alphabet shares dropped 8 per cent in New York morning trading on Wednesday, leaving it on track for the fifth-worst trading day in the past decade and wiping about $200bn from its market capitalisation. Still, the stock had previously risen 45 per cent in the past 12 months, valuing it at $2.5tn behind only Apple, Microsoft, Nvidia and Amazon.

Alphabet’s fall echoed that of Microsoft last week, which also lost $200bn in market value after it also missed cloud growth estimates and said AI spending would reach $80bn in its fiscal year ending on June 30. The same day, Meta’s chief executive Mark Zuckerberg vowed to spend “hundreds of billions” more to stay in the vanguard of AI research.

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The market reaction reflects broader concerns about spending at US groups that build and operate the vast data centres filled with advanced chips that they claim are needed to train and run AI’s large-language models.

The Alphabet sell-off also builds on doubts sown last month by a new model from Chinese start-up DeepSeek, which claimed to achieve comparable performance to US AI leaders including Google’s Gemini, OpenAI’s ChatGPT and Anthropic’s Claude on a shoestring budget using far fewer advanced Nvidia chips.

Pichai said DeepSeek had a “tremendous team” that had shown “you can drive a lot of efficiency to serve these [AI] models really well”.

He also fielded analysts’ questions about whether Gemini and its rivals were cannibalising its core search business, as users increasingly use chatbots to find information and answers online, obviating the need to click on the advertisements that support its free service.

There is little evidence of its dominant search engine being challenged yet. Search-linked ad revenue rose 13 per cent to $54bn in the quarter, beating estimates, supported by another quarter of ad growth at YouTube.

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Overall, group revenue rose 12 per cent to $96.5bn in the fourth quarter compared with the same three-month period a year earlier. Excluding traffic acquisition costs paid to advertising and device partners, that figure was $81.6bn, missing Wall Street estimates of $82.8bn in a Bloomberg poll. Net income rose 28 per cent to $26.5bn.

Google is also in the crosshairs of regulators around the world. The company faces the prospect of being broken up after losing a landmark case brought by the US Department of Justice, which resulted in a ruling that its search business had engaged in monopolistic behaviour.

This week it emerged that China had revived antitrust investigations into Google’s Android mobile operating system, raiding its Beijing office in a move that has been interpreted as leverage in tariff negotiations with US President Donald Trump.

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Trump fires last members of election commission, inciting fears of midterm ‘chaos’

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Trump fires last members of election commission, inciting fears of midterm ‘chaos’

Donald Trump has terminated the remaining members of the independent, federal commission that assists election administration officials nationwide just a few months before the midterm elections, multiple outlets reported Thursday.

The remaining three commissioners of the four-member bipartisan commission ⁠were forced out on Thursday in different ways. The one Republican appointee resigned and the other ⁠two, Democratic appointees were notified of their terminations via email from ​the White House presidential personnel office.

“On ‌behalf of President ‌Donald J Trump, I am writing to inform you that your position ‌as Commissioner of the Election Assistance Commission is terminated, effective immediately. Thank you for your service,” the email, seen by Reuters, said.

The White House did not immediately respond to a request for comment.

The Election Assistance Commission serves as a “national clearinghouse of information on election ‌administration”, accredits testing laboratories and certifies voting systems, and maintains the national mail-voter registration form developed by the National ​Voter Registration Act of 1993, according to the commission’s website. The terminations follow Trump and top administration officials’ advocacy to change vote-by-mail requirements and investigations into the 2020 election outcome, which Trump lost to Democrat Joe Biden.

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“It is ⁠irresponsible and dangerous that this Administration remains dead set on ​causing chaos for ​our election officials across this ​country,” Arizona secretary of state Adrian Fontes said in a ​Thursday statement. “This ‌move undermines the integrity ​of nonpartisan ​election administration.”

The 2002 law that established the commission, the Help America Vote Act, states the president can appoint replacements to the commission.

It is unclear how Trump will move ahead with the commission.

Reuters contributed reporting

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Former Olympian pleads not guilty in reflecting pool vandalism charges

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Former Olympian pleads not guilty in reflecting pool vandalism charges

Former U.S. Olympian David Hearn (left) walks with his attorney Norman Eisen to speak to reporters and protesters gathered after his arraignment at the Superior Court of the District of Columbia in Washington, D.C. on Thursday.

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Former U.S. Olympic canoeist David Hearn pleaded not guilty to damaging the Lincoln Memorial Reflecting Pool in D.C. Superior Court Thursday morning.

Federal prosecutors charged Hearn with a single count of destruction of property causing more than $1,000 in damage to the pool.

Hearn has previously claimed, which his attorneys repeated during a short press conference outside the court, that he simply touched the water in the pool out of curiosity.

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The Trump administration had just completed a $14 million renovation of the pool.

But shortly after the work finished, peeling paint and algae gathered in the water. The remodel has been largely criticized as a massive failure and waste of taxpayer dollars.

Superior Court Judge Carmen McLean released Hearn on his own recognizance. His next hearing is scheduled for Aug. 5.

Norm Eisen, one of Hearn’s attorneys, spoke to reporters outside of court following the hearing. He said the administration is using Hearn as a “scapegoat … for their own failures.”

“It is not a crime to touch the reflecting pool, to touch water in the United States of America,” he said.

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Prosecutors say there is a host of evidence against Hearn.

This is a developing story.

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Three more people charged with damaging Reflecting Pool after Trump’s multimillion-dollar restoration | CNN Politics

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Three more people charged with damaging Reflecting Pool after Trump’s multimillion-dollar restoration | CNN Politics

Three more people have been criminally charged with destruction of property at the Lincoln Memorial Reflecting Pool.

Officers say they detained Cameron Thiers, Sophie Dennison-Gibby and Justin Carreno one Saturday afternoon in June and described in court documents witnessing them peeling and removing pieces of blue paint from the Reflecting Pool.

One officer “witnessed Carreno reach down into the reflecting pool and pull up a piece of the blue paint,” according to the court documents.

The officer who detained Dennison-Gibby “found 1 additional piece of the reflecting pool liner” in her purse, the documents said.

All three incidents were recorded on the officers’ body worn cameras, they said in the court documents.

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Several “partnering law enforcement agencies assigned to the Reflecting Pool” working with US Park Police were involved in detaining the two men and one woman — including officers from Texas, Oklahoma, Montana and California.

One of the officers said in court documents that Thiers “admitted to removing a piece of blue sealant from the Reflecting Pool and still had it in his hand when I made contact with him.”

The three defendants were arraigned in court Wednesday and pleaded not guilty to the misdemeanor charges of destruction of property with a value less than $1,000. The judge ordered them to stay away from the Reflecting Pool.

Lawyers for Thiers and Dennison-Gibby declined to comment. CNN has reached out to Carreno’s attorney.

If found guilty of destruction of property, the defendants could be fined up to $1,000 and face a maximum of 180 days behind bars.

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The New York Times first reported that three additional people had been charged with damaging the Reflecting Pool.

President Donald Trump has repeatedly claimed that vandals caused major damage to the pool by gashing the lining after his administration spent more than $14 million on renovations, though he has not provided evidence to support that claim. The officers who charged Carreno, Thiers and Dennison-Gibby did not accuse them of gashing the lining.

Former Olympic canoeist David Hearn was indicted by a grand jury in Washington, DC, last week for allegedly damaging the Reflecting Pool. Hearn — unlike Carreno, Thiers and Dennison-Gibby – was charged with destruction of property with a value of more than $1,000 which carries a maximum penalty of 10 years in prison, if convicted. He is set to be arraigned in court Thursday.

Crews began draining the Reflecting Pool over the weekend to make repairs, according to Interior Secretary Doug Burgum, for the second time in three months.

The move comes after weeks of problems – algae blooms, green-hued water, a chipping bottom and the administration’s allegations of vandalism – that have plagued the iconic landmark, making its woes the subject of national interest.

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