BN Daybreak Thurs 5 Feb: Alphabet’s AI splurge, Epstein, Crypto crash, and Race to replace Steenhuisen

Are tech giants spending too much on AI? Alphabet’s capex is set to double, rattling investors. Alec Hogg breaks down the numbers, alongside a 7% drop in crypto and a weaker Rand. The briefing also covers the political earthquake in the DA with Steenhuisen’s exit, Elon Musk’s new "Muskverse" play, and the startling revelations found in leaked suspicious activity reports regarding Jeffrey Epstein..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.BizNews Reporter.More developments are emerging from Iran. Most overnight news, however, focused on Wall Street, including terrific numbers from Alphabet (Google). Our partners at Bloomberg report that the US and Iran are set to meet in Oman this Friday to discuss a nuclear deal.Even so, President Trump issued a warning to Iranian leaders as US military forces entered the region. Speaking exclusively to NBC News, Trump suggested the Iranian leadership "should be very worried," claiming his previous actions to "wipe out their nuclear" capabilities are what established current peace in the Middle East. While the US seeks to discuss broader issues, Iranian leadership reportedly wants to limit discussions strictly to its nuclear programme. Tech and Corporate earningsAlphabet: Fourth-quarter revenue exceeded expectations, but the company plans to double capital expenditure (CapEx) in 2026 to invest in data centres and AI. Despite blowout numbers, shares finished the day 2.5% lower after initial volatility. Qualcomm: The largest maker of smartphone processors gave a lackluster forecast, leading to a 9% drop in share price. Concerns remain regarding component shortages and expensive memory prices. ARM Holdings: The British chip designer issued a disappointing sales forecast, with U.S.-listed shares falling more than 6%. Apple: A "standout in a sea of red," Apple shares rose by 2.5%. Commodity and currency watchThe South African Rand started the day at R16.16 against the U.S. dollar, following a decline in the gold price. Gold is trading at $4,900, while Bitcoin continued its downward spiral, dropping 7% to $71,000. The crash in precious metals is being attributed to the Chinese Commodities Exchange doubling margin requirements on gold, silver, and copper. This "out of the blue" move panicked markets more than the news of Donald Trump’s appointment of a new Federal Reserve governor. Local South African politics John Steenhuisen has confirmed he will not stand for re-election as leader of the Democratic Alliance (DA). He stated he intends to focus his full energy as Minister of Agriculture on eradicating a devastating foot-and-mouth disease outbreak.Geordin Hill-Lewis, the 39-year-old Mayor of Cape Town, is considered the favourite to succeed him in April. Other potential candidates include Deputy Finance Minister Ashor Sarupen. While social media speculated about Rob Hersov entering the race, he has dismissed the claims, stating he has "zero interest" and that his values align more with the Freedom Front Plus.The "Musk-verse" expansionElon Musk is merging SpaceX and xAI into a single unit valued at $1.25 trillion. Musk plans to place data centres in space to harness solar energy for AI processing. SpaceX is also reportedly lining up a $50 billion IPO for later this summer, which would be the largest of all time. The Epstein Files inquiryNew information from the Epstein files was released over the weekend, revealing "suspicious activity reports" from the US Treasury's financial crimes unit (FinCEN). These documents, typically impossible to obtain via FOIA, show how financial institutions flagged Jeffrey Epstein's money movements as potential money laundering as far back as 2019. Investigative journalist Jason Leopold notes that while these files provide a roadmap of Epstein's financial web, many allegations—including those involving Donald Trump—remain unverified as there is no evidence the FBI followed up on these specific tips. Furthermore, the presence of names like Elon Musk or Richard Branson in Epstein's contacts is being scrutinised, though Alec Hogg cautions that Epstein acted as a "fixer" who connected many people. There are also reportedly South African connections emerging, as Epstein apparently visited Cape Town.

BN Daybreak Thurs 5 Feb: Alphabet’s AI splurge, Epstein, Crypto crash, and Race to replace Steenhuisen

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