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Business

Google burning through cash with spiralling AI costs

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Google's primary-colored logo outside of a building.

Google parent Alphabet saw its business continue to grow in recent months, yet growing spending on artificial intelligence (AI) infrastructure put its leftover cash into negative territory.

The company’s free cash flow, the cash it maintained after paying for operations and investments, came in at negative $5.9bn (£4.3bn) for the first time in at least a decade, according to its past financial records.

Alphabet’s spending on AI is now expected to hit as much as $205bn this year, an increase from $190bn, as major tech companies race to build around a new wave of the technology.

Meanwhile, Alphabet’s combined quarterly revenue hit $119.8bn, up 23% compared with the same time last year.

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But the company’s stock fell 4% in after hours trading.

Anat Ashkanazi, Google’s chief financial officer, noted on a call with financial analysts that the company had shown negative free cash flow due to growing capital expenditures, essentially all of which was related to AI spending.

She said the company spent $45bn in the second quarter, with 60% of the cost going towards servers and the remaining 40% going towards data centres.

Alphabet’s capital spending was $36bn in the first quarter of this year.

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Ashkanazi said on the call that when it comes to AI, “the demand still outpaces that investment”.

“As long as we see these attractive opportunities to invest, we will continue to invest.”

Sundar Pichai, Google’s chief executive, said that the technological shift to AI tools and capabilities still “feels like early innings in a shift across multiple areas” and that the company’s plans around generating financial returns on its spending were “disciplined”.

“What I see with what you can do with frontier capabilities, there is still a lot of work left to do to translate that into experiences for our users. So that looks like extraordinary opportunities with extraordinary returns.”

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Tesla, the electric vehicle company controlled by Elon Musk, also reported negative free cash flow on Wednesday of $1.1bn for the second quarter due to its own increasing investment costs.

It was the company’s first negative showing of leftover cash in two years, according to its financial records.

Vaibhav Taneja, Tesla’s chief financial officer, said during a call with analysts that the company will spend as much as $25bn this year, more than double its capital spending in 2025.

He added that Tesla was in “a big investment cycle” and that its spending would probably increase further over the next three years.

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Tesla’s stock also dropped by 4% in after hours trading.

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Business

Jet-Fuel Prices Rear Up Again at Alaska Air

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Alaska Air recorded a second-quarter loss.

Alaska Air shares fell after it reported a second-quarter loss and forecast third-quarter earnings below investors’ expectations. Blame fuel prices, which have been on the rise again this month as the conflict in Iran has intensified.

Airlines have been boosting fares to cover higher costs, and even with higher fares, planes are as full as ever, Alaska President and Chief Financial Officer Shane Tackett said in an interview. “I think people are really choosing experiences when they can with whatever discretionary income they may have, and it doesn’t feel to us like that’s likely to change.”

Alaska expects adjusted earnings to range between break-even and $1 a share for the third quarter, compared with the $1.47 forecast by investors. Shares fell 1.9% in after-hours trading.

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Business

What we know about 20% cut to some business rates

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A red pub door with a 'Come in we're open' sign

Pubs, clubs and live music venues in England will get a 20% cut in business rates from April.

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Business

Government to cut business rates for pubs, clubs and music venues

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Rachel, a woman with straight shoulder-length blonde hair wearing a graduation cap. She has a nose stud, and wears light pink lipstick.

Pubs, clubs and live music venues in England will be given a 20% cut to business rates from April, which the government estimates will save firms around £1,100 next year.

In his third policy announcement since becoming prime minister, Andy Burnham said: “For too long, governments have stood by while cherished venues have disappeared from our local high streets.”

The cut will cost £100m and will be funded by a review of tax relief on firms such as vape shops which “do not make a positive contribution to local communities”, the government said.

Hospitality bosses welcomed the support, but some pub owners said the package would not go far enough to offset the impact of cost increases elsewhere.

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The 20% business rates discount will not apply to the “very largest” live music venues. Details about which businesses are eligible will be announced at Chancellor John Healey’s first Budget in the autumn.

The cut is expected to benefit almost 32,000 venues, the government said.

Iain Hoskins, who owns Ma Pub Group in Liverpool, told the BBC the relief would help “chip away” at rising costs but questioned how many venues would benefit.

It could be “very meaningful”, he said, but “as always, the devil is in the detail”.

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His pubs have previously missed out on government business rates support, and “the increases were so huge last year that now we’re sort of chipping away at some of those increases”.

Under previous chancellor Rachel Reeves, the government said last year it would scale back business rate discounts that had been in force since the pandemic and announced that there would be no discount at all from April this year.

That, combined with big upward adjustments to rateable values of pub premises, left landlords with the prospect of much higher rates bills.

Following criticism from the hospitality industry, the government cut business rates for pubs and music venues by 15% earlier in 2026.

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The 20% discount will apply on top of the existing support.

Commenting on the cut which comes into effect next year, Steve Perez, founder of soft drinks company Global Brands and an owner of two hotels, said the announcement is “welcome… but this won’t make any material difference to any pub”.

UK Hospitality’s chief executive, Allen Simpson, said Burham’s plans are “a good start” which he said “suggests that his affection for hospitality has survived the trip down the M1”.

But he added that it is “not for everybody in hospitality”.

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The change to business rates for some hospitality firms is the latest move in what Burnham hopes will provide “breathing space” for people and businesses.

On Tuesday, the government announced a cut of 5% VAT on electricity bills followed by capping bus fares at £2 in England outside London.

As well as reviewing tax relief on firms such as vape shops in order to fund the rate cut, the government also said it will “crack down” on businesses selling through online marketplaces which “do not comply with their tax obligations”.

The Night Time Industries Association’s chief executive, Michael Kill, said the tax break could provide “meaningful relief to businesses facing sustained cost pressures”.

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But he said the sector is waiting for more details while questions remain about the exclusion of the largest live music venues.

The Federation of Small Businesses (FSB) said Thursday’s announcement must be “a downpayment on action that reaches across the small business community”.

FSB policy chief Tina McKenzie, said the plans were encouraging and fix the damage caused by past business rates decisions which are “holding back small business growth and jobs in every postcode”.

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MSCI Q2 2026: Investors' Fears Are Justified

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Second Quarter Business Planning and Performance Review

MSCI Q2 2026: Investors' Fears Are Justified

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Business

Earnings call transcript: STMicroelectronics beats Q2 2026 estimates, shares fall premarket

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Earnings call transcript: STMicroelectronics beats Q2 2026 estimates, shares fall premarket

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Business

FareShare North East ‘devastated’ by Middlesbrough break-in

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Rachel, a woman with straight shoulder-length blonde hair wearing a graduation cap. She has a nose stud, and wears light pink lipstick.

A charity distributing food to the most needy said it had been “devastated” after thieves smashed their way into its warehouse, leaving tonnes of supplies ruined.

They broke into the Teesside base of FareShare North East on Tuesday and cut the power to the charity’s walk-in freezer and chiller units, meaning perishables like milk and meat had to be thrown out.

The charity said it lost 16 tonnes of food – the equivalent of 7,000 meals.

Middlesbrough hub manager Natasha Flanagan said it was “heartbreaking”, adding: “We’ve got a really great team of volunteers and staff and we try our best every day to get food out to people that need it.”

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FareShare North East redistributes food donated by supermarkets from its warehouses in Newcastle and Middlesbrough to more than 200 community groups, including food banks.

The charity has been in Middlesbrough since 2023 and moved to its new base on Skippers Lane about four months ago.

Flanagan uncovered the damage when she arrived for work.

She said: “Lockers were ransacked, the staff drawers in the main warehouse were ransacked, and then I’ve seen the chiller doors were left open and the freezer door which has caused significant damage to food.

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“Honestly it’s heartbreaking and we do really good things here.”

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Business

How Christopher O’Reilly Palm Beach Built a Career Exploring the Bahamas by Yacht

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How Christopher O’Reilly Palm Beach Built a Career Exploring the Bahamas by Yacht

Christopher O’Reilly Palm Beach has spent much of his career navigating some of the Caribbean’s most beautiful waters. Raised in Greenwich, Connecticut, he grew up sailing on Long Island Sound and developed an early appreciation for life on the water. What began as a childhood passion eventually became a career operating motor yachts throughout South Florida and the Bahamas.

After attending Brunswick School and Fairfield University, O’Reilly began working in the Marine Department at Riverside Yacht Club. He later earned his Merchant Mariner Credential and entered the yachting industry full-time, advancing from mate to captain aboard motor yachts up to 126 feet in length.

Much of his career has centered on captaining yachts throughout the Bahamas. Operating from Nassau, he guided guests to some of the country’s most sought-after destinations, including Harbour Island, known locally as Briland, Spanish Wells, Rose Island, and the Exumas.

Trips often included snorkeling at Thunderball Grotto, exploring the Exuma Cays Land and Sea Park, visiting Rocky Dundas Cave, stopping at Danger Reef, and taking guests to Big Major Cay to see the famous swimming pigs.

In 2019, O’Reilly was featured by Select Yachts after being named captain of the motor yacht Lady Sharon Gale. The recognition reflected years of experience managing vessels, planning voyages, and creating memorable experiences for guests throughout the Bahamas.

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Today, he continues to share his knowledge of Bahamas yachting, navigation, and destination planning while remaining closely connected to the boating lifestyle he has built his career around.

What first inspired you to work on the water?

Growing up in Greenwich, Connecticut, I spent a lot of time sailing on Long Island Sound. I enjoyed hockey growing up, but the water always pulled me in. I liked the freedom of it and the fact that every day felt different.

Once I started spending time around marinas and yacht crews, I realized there was an entire industry built around boating and travel. That opened my eyes to what was possible.

What attracted you to captaining yachts in the Bahamas?

The Bahamas offers something different every day. You can leave Nassau in the morning and be anchored off a quiet cay a few hours later. Every island has its own character.

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I enjoyed helping guests experience places they might never have discovered on their own. A lot of people arrive with a few destinations in mind, but by the end of the trip, they have new favorites.

What were some of the most popular routes you captained?

Harbour Island and Spanish Wells were always requested. Guests loved the atmosphere and the boating culture around those areas.

The Exumas were another favorite because of the variety. One day, we might be snorkeling at Thunderball Grotto. The next day, we could explore the Exuma Cays Land and Sea Park or head to Big Major Cay.

Rose Island was popular for shorter day trips from Nassau. Guests could spend the day swimming, relaxing on the beach, and enjoying jet skis without committing to a longer voyage.

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What makes the Exumas so special?

The diversity.

You have remote anchorages, incredible snorkeling, marine parks, sandbars, caves, and wildlife all within a relatively small area. The water itself is unlike almost anywhere else.

I remember guests arriving with high expectations because they had seen photos online. Almost every time, they would say the water looked even better in person.

What destination surprised guests the most?

Rocky Dundas Cave.

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Many guests had never heard of it before arriving. Once they swam inside and saw the limestone formations, it became one of the most talked-about parts of the trip.

Thunderball Grotto was another location that always impressed people. The combination of the cave structure and marine life creates a very unique experience.

What do people misunderstand about yacht travel in the Bahamas?

Many people think it is all about luxury.

What makes it memorable is access. A yacht allows you to experience places that are difficult to reach any other way. You can anchor near an empty beach, explore a remote cay, or spend the afternoon in an area with very few people around.

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That flexibility changes the entire experience.

What happens behind the scenes to make those trips successful?

Planning.

You are constantly monitoring weather, tides, navigation routes, fuel consumption, and timing. Guests see the destinations. The crew is thinking about everything that needs to happen to get there safely and efficiently.

A smooth trip usually reflects extensive preparation before the yacht ever leaves the dock.

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What skills matter most for a yacht captain?

Situational awareness is a big one.

You need to understand conditions, anticipate changes, and make good decisions before problems develop.

Communication is also important. Guests want to enjoy themselves. The crew needs to stay coordinated. Clear communication helps everything run smoothly.

What advice would you give someone interested in a career in yachting?

Spend time around the industry.

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Visit marinas. Talk to captains and crew members. Learn how boats operate. The best education often comes from being around experienced people and paying attention.

Yachting offers opportunities to travel, learn, and build practical skills. It rewards people who are willing to work hard and stay adaptable.

What does success mean to you today?

Creating great experiences for people and doing things right.

Some of the most rewarding moments came when guests finished a trip and immediately started talking about when they wanted to come back.

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When people leave with memories they will talk about for years, that feels like success.

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At Close of Business podcast July 23 2026

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At Close of Business podcast July 23 2026

Tom Zaunmayr speaks with Mark Beyer about DevelopmentWA’s residential land developments in the Pilbara.

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Business

Goosehead Insurance, Inc. (GSHD) Q2 2026 Earnings Call Transcript

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OneWater Marine Inc. (ONEW) Q1 2026 Earnings Call Transcript