Big Tech blows $650bn on AI while Fed stays put

Anthropic's Claude.ai crashed for 78 minutes yesterday, hitting users with 403 authentication errors and API failures during peak usage. The status page logged elevated errors across Claude Sonnet 4.5 and MCP apps, with Hacker News threads drawing 70+ upvotes from frustrated users. This follows repeated outages as Claude scales to meet enterprise demand, undermining its positioning against OpenAI's more stable infrastructure. The timing is brutal: businesses integrating Claude for coding and automation workflows are questioning reliability just as Anthropic seeks to defend market share. Each downtime episode hands ammunition to competitors in an increasingly crowded AI assistant market.

Meta stock fell 13% this week after the company raised 2026 capex guidance to $145 billion, driven by AI infrastructure and a Texas data center that ballooned from $1.5 billion to $10 billion. Legal defeats in New Mexico and Los Angeles compounded investor anxiety, while the company delayed rolling out a new AI model due to performance issues. Meta is simultaneously cutting hundreds of jobs to contain costs while pursuing what executives call "frontier ambition" in superintelligence. The 28% drop from recent highs reflects a broader reckoning: investors are no longer willing to fund massive AI bets without clear monetization timelines. Analysts still see 62% upside to $850, but that requires faith in returns years away.

Amazon raised quarterly capex to $31.4 billion, implying an annualized pace exceeding $118 billion as AWS chases AI demand. The company plans $200 billion for data centers and specialized chips, including $50 billion for US government AI infrastructure with 1.3 gigawatts of power capacity. CFO Brian Olsavsky confirmed AWS drives the largest share of spending, with elevated levels expected through 2026. Amazon issued $12 billion in bonds last year to fund the buildout, positioning against Alphabet's $85 billion capex target. The scale reflects hyperscalers' recognition that AI infrastructure is winner-take-all: fall behind now, lose the cloud wars permanently.

Foreign Minister Winston Peters told Washington to turn "rhetoric into reality" on fuel supply support for Pacific nations, specifically requesting tanker deployments. Pacific Islands depend on oil for 80% of energy needs, importing refined fuel from Singapore as Middle East instability threatens supply chains. Peters met Secretary of State Marco Rubio and Deputy Secretary Christopher Landau, describing US interest as "encouraging" but demanding concrete action. The IMF flagged "very concerned" outlook as fuel prices surge across the region. This reflects broader geopolitical competition for Pacific influence, with New Zealand positioning as intermediary between island partners and US strategic interests.

Two of America's largest apartment owners are discussing a potential combination that would create a rental giant spanning high-demand coastal markets. Early-stage talks between AvalonBay and Equity Residential come as renting costs $2,100 monthly less than buying in core markets, supporting occupancy above 90% and turnover under 35%. AvalonBay recently completed a $263 million asset swap with UDR, trading Boston and San Francisco properties for Southern California assets plus cash. The timing exploits favorable rent-versus-buy economics: only 8% of residents are leaving to purchase homes, down from historical norms. A merger would consolidate market power just as supply constraints and elevated mortgage rates create structural tailwinds for rental operators.

South Korean prosecutors indicted Lee Jae-yong for manipulating a 2015 merger between Cheil Industries and Samsung C&T to secure control "at the lowest possible cost." Ten other executives face charges including stock price manipulation and inflating Samsung Bioepis valuations to deceive shareholders. The indictment proceeded despite an external expert committee recommending no charges two months earlier, signaling prosecutors' confidence in their case. Lee simultaneously faces corruption charges tied to the Park Geun-hye scandal, creating dual legal jeopardy for one of Korea's richest men. In a rare 2015 statement, Lee vowed not to pass company control to his children, effectively ending the founding family's multi-generational grip on the conglomerate.

Darren Yip, who runs ASX's largest Markets division covering equity and derivatives trading, becomes interim CEO during the search for permanent leadership. Yip joined from Morgan Stanley in March 2023, bringing 21 years of prime brokerage experience including managing multi-billion dollar balance sheets across APAC. His promotion follows executive bonus cuts amid the delayed CHESS replacement system and regulatory scrutiny over operational failures. Yip expanded his role in 2025 to include Listings after Blair Beaton's departure, consolidating control over ASX's core revenue streams. The appointment signals continuity during a strategic review focused on risk management improvements.

India now supplies 916,300 Australian residents, representing 10.7% of the overseas-born population and doubling from 2014 levels. Permanent visa grants to Indians hit 49,848 in 2023-24, primarily through skilled economic streams targeting IT, engineering, and medical professionals. The Indian-born community posts the highest education levels among migrant groups, with 54.6% holding bachelor's degrees versus 17.2% nationally, and median weekly income of $785. With 150,000 new Indian arrivals in the past three years alone, the demographic shift reflects Australia's economic migration focus but adds pressure to housing and infrastructure amid record overseas-born growth now reaching 31.5% of the total population.

US Attorney closed criminal probe into Fed Chair Powell last Friday; he stays on Board of Governors post-transition to Kevin Warsh around May 15th.