Technology

NINTENDO Co. and Sony Group Corp. will face scrutiny over how soaring memory chip prices driven by AI demand have affected their game console profitability when they report earnings this week.

The results will reveal whether the two Japanese gaming giants can maintain strong performance despite cost pressures, with Nintendo’s Switch 2 showing robust sales momentum while Sony’s five-year-old PlayStation 5 may have benefited from a cheaper Japanese-language only version introduced to compete directly with Nintendo. 

Data from US market tracker Circana showed that Switch 2 sales remained strong, with the console being the best-selling video game hardware in the US in 2025. Jefferies noted that the narrative of a “weakening Switch 2 has been dismantled” by that data.

Sony also announced plans to spin off control of its home entertainment business, including the flagship Bravia brand, to a joint venture with China’s TCL Electronics Holdings Ltd. It might signal wider restructuring and closer focus on its more profitable segments, Bloomberg Intelligence said. 

Meanwhile, Japanese banks Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. will report third-quarter results following the Bank of Japan’s December interest rate hike to 0.75%. Last Friday, Sumitomo Mitsui Financial Group Inc. set the tone for its lender peers as profit beat estimates buoyed by higher interest rates. SMFG is likely to beat its full-year net revenue outlook, BI said after the results. –BLOOMBERG

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MICROSOFT Corp. shares got caught up in a selloff Thursday that wiped out $357 billion in value, second-largest for a single session in stock market history.

The software giant’s stock closed down 10%, its biggest plunge since March 2020, following Microsoft’s earnings after the bell Wednesday, which showed record spending on artificial intelligence as growth at its key cloud unit slowed. 

The only bigger one-day valuation destruction was Nvidia Corp.’s $593 billion rout last year after the launch of DeepSeek’s low-cost AI model. Microsoft’s move is larger than the market capitalizations of more than 90% of S&P 500 Index members, according to data compiled by Bloomberg.

The chill was felt elsewhere as well, with peers including Alphabet Inc. and Nvidia each shedding more than $100 billion at one point on Thursday. Alphabet shares recovered, closing up 0.7%, while Amazon settled down 0.5%.   

The selloff comes amid heightened skepticism from investors that the hundreds of billions of dollars Big Tech is spending on AI will eventually pay off. Microsoft’s results showed a 66% rise in capital expenditures in its most recent quarter to a record $37.5 billion, while growth at its closely tracked Azure cloud-computing unit slowed from the prior quarter.

“Since it is becoming even more evident that Microsoft is not going to garner a strong ROI from their massive AI investment, their shares need to be revalued back down to a level that is more consistent with its historic fair value,” said Matthew Maley, Chief Market Strategist at Miller Tabak + Co.

Microsoft’s selloff is among the worst in its history. Since its initial public offering in 1986, the stock has only seen a handful of days with bigger declines, including on Black Monday in 1987, during the dot-com bubble, and at the height of the Covid 19 fueled selloff in 2020. –BLOOMBERG

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NINTENDO Co. and Sony Group Corp. will face scrutiny over how soaring memory chip prices driven by AI demand have affected their game console profitability when they report earnings next week.

The results will reveal whether the two Japanese gaming giants can maintain strong performance despite cost pressures, with Nintendo’s Switch 2 showing robust sales momentum while Sony’s five-year-old PlayStation 5 may have benefited from a cheaper Japanese-language only version introduced to compete directly with Nintendo. 

Data from US market tracker Circana showed that Switch 2 sales remained strong, with the console being the best-selling video game hardware in the US in 2025. Jefferies noted that the narrative of a “weakening Switch 2 has been dismantled” by that data.

Sony also announced plans to spin off control of its home entertainment business, including the flagship Bravia brand, to a joint venture with China’s TCL Electronics Holdings Ltd. It might signal wider restructuring and closer focus on its more profitable segments, Bloomberg Intelligence said. 

Meanwhile, Japanese banks Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. will report third-quarter results following the Bank of Japan’s December interest rate hike to 0.75%. Investors will also look to Sumitomo Mitsui Financial Group Inc.’s Friday earnings for initial insight. SMBC Nikko noted there’s been no fallout from the central bank’s rate hikes and that “business conditions among banks are unlikely to diverge that much.” –BLOOMBERG

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by CHRIS WELCH 

SEVERAL months after Amazon. com Inc bought artificial intelligence (AI) hardware start-up Bee, the company said it’s working to make its US$50 (RM203) always-listening wearable more proactive, and indicated a larger revamp is in store. 

Bee’s device, which can be worn on the wrist or clipped to a shirt, records and transcribes its owner’s activities, using that information to recap conversations and automatically create to-do lists in a companion app throughout the day. 

It doesn’t have a display or built-in camera, and is designed to be “ambient AI” hardware that fades into the background without the user needing to constantly interact with it. The small gadget’s battery can last as long as a week before needing a recharge, according to the company. 

Early AI-powered devices such as the Humane AI Pin and Rabbit R1 have landed with a thud, owing to issues such as bugs, poor battery life and the lack of any standout features that would make them preferable to smartphones. 

Amazon has a spotty history with wearables and has shown less dedication to the category compared to its tentpole Fire TV, Kindle and Echo hardware. The company discontinued its Halo health tracker wristband in 2023 and has not released a new pair of wireless earbuds in almost three years. The Halo device offered some features that have carried forward with Bee, like the ability to detect a speaker’s mood. 

Bee is trying to chart a different path from those gadgets by acting as a comprehensive daily journal that requires no prompting or manual input. Start-ups like Plaud have released competing gadgets with a similar purpose. 

The notion of Amazon taking ownership of an always-listening accessory has made some people wary, but the start-up said it maintains stringent privacy practices. 

“We have never stored audio recordings, and this hasn’t changed,” the company wrote on its website after announcing the Amazon deal. “All audio recordings are processed in real-time, deleted after processing” and never saved or stored, it said. 

Since officially joining Amazon in September as an eight-person team, Bee has added features including voice notes, which let users capture ideas and quick thoughts with a quick button press, and daily insights that pick up on trends in “how you’re feeling” and “shifts in your relationships,” the company said in a blog post earlier this month. 

Co-founder Maria de Lourdes Zollo and her colleagues are also trying to make Bee more proactive. A recent “actions” feature links the assistant to your calendar and email, letting Bee draft emails or create a meeting invite. 

“So directly from the app, you can connect with your Gmail and your calendar and directly from there, we can take actions on your behalf, and basically follow up the conversations,” Zollo told Bloomberg in an interview at the CES consumer technology conference in Las Vegas two weeks ago. 

Bee’s days as a standalone brand might be winding down, however. “It’s certainly an Amazon device and service at this point, and we’re proud to have 

Bee in the family,” said Daniel Rausch, Amazon’s VP of Alexa and Echo, when asked whether the product will get a makeover. “You can imagine what we imagine, I think is how I would put it, and I’d ask you to stay tuned for that.” Asked about a recent string of headlines detailing how some consumers have formed overly close bonds with AI agents, Rausch said: “I think it’s just about being responsible,” referring to the company’s obligation to users. 

“We’ve had a responsible AI team, a trust and privacy team for the entire decade that we’ve been doing this,” he said. “I think some of these topics are newer to others, but frankly people have been forming close bonds, sharing details, communicating things to Alexa, looking for support from Alexa, looking for humour from Alexa for literally as long as it’s been out.”

Rausch said the rise of generative AI and the launch of its more conversational Alexa+ assistant presented ideal timing for taking another swing. And rather than start from scratch, Amazon was impressed by what Zollo and her start-up had produced. “We want to invent for customers, and Maria and her team are incredible inventors,” Rausch said. “The passion is there, the purpose and focus is there and this is a team on a mission to do something special.” 

Unlike the AI Pin and several new concepts shown at CES two weeks ago, the Bee hardware lacks a camera to help analyse and understand a customer’s environment. “When we started Bee, our first prototype was actually with vision, with a camera, but as a start-up, it was too expensive,” Zollo said. “In the future, I believe there will be an opportunity for other devices that have a camera on them.” 

Similar to others in the industry, Zollo doesn’t view AI wearables as a winner-takes-all game. “It won’t be one device and that’s it,” she said. “When I think about Bee, I don’t think about the next wearable and that’s all. 

What I’m more thinking about holistically is, what is the constellation of devices that you wear during the day?” 

Adaptability to a consumer’s individual style is critical to remaining on that list of everyday accessories, she said. 

“I believe that there will an escalation of accessories that we have Bee on,” Zollo said. “We want to be with you, and we understand you have your own sense of fashion, so we want to understand what is good for you.”

• This article first appeared in The Malaysian Reserve weekly print edition

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By AZALEA AZUAR

ALTEL Communications has launched its locally hosted cloud ecosystem “Altel Cloud” to support Malaysia’s rapid digital adoption while meeting strict data residency and enterprise performance requirements.

Built on Altel position within the Tradewinds Group, Altel Cloud is shaped by real-world operational experience rather than generic cloud models. 

The cloud platform draws on the group’s extensive involvement across key sectors such as automotive, ports, utilities, plantations, banking, logistics, property and technology, ensuring the platform is tailored to mission-critical, industry-specific needs.

Beyond infrastructure, it offers end-to-end services covering design, integration, migration, and managed operations.

Altel Cloud also delivers high-speed, low-latency performance for demanding use cases, supporting industrial automation and 5G private networks as it was built with Private and Edge Cloud configurations.

It combines strong domestic data security with hybrid and multi-cloud capabilities, enabling businesses to innovate globally while keeping critical workloads within Malaysia.

Altel Group CEO Mohamed Helmi Harith said the company aims to become a leading enterprise technology provider focused on mission-critical systems, where reliability is essential and there is no room for failure.

“Our journey aligns directly with Malaysia’s national digital agenda, which aims to build a high-class digital economy backed by low-cost infrastructure. As an entrepreneur, Altel’s role is to bridge the gap between his national aspirations and practical day-to-day operations.

“We take a broad vision for national digital resilience and translate it into solutions that work in the five states, governments, and our institution-based community,” he said in his opening speech during the launching ceremony held in Kuala Lumpur on Thursday.

Altel Cloud leverages the Group’s collective expertise to deliver a future-ready platform, integrating advanced technologies like AI-driven cybersecurity with 24/7 threat detection and response through its Security Operations Centre (SOC).

Meanwhile, Altel Head of Internet of Things (IOT) Khairul Rahim Khairuddin said during his presentation “Advancing Business Through Integrated Technologies” that Malaysian businesses must accelerate the adoption of IoT and integrated digital platforms to overcome data fragmentation, infrastructure bottlenecks and rising operational inefficiencies.

He said many organisations continue to operate with siloed data across departments such as marketing, operations and product development, resulting in inconsistent insights and suboptimal decision-making.

“My interpretation of the product data is slightly different from the interpretation of the item’s data. Hence, the result might be different,” he said.

Also present during the launching ceremony was Deputy Digital Minister Datuk Wilson Ugak Anak Kumbong.

“I believe that 20 to 40 years from now, we are moving towards positioning Malaysia as an AI hub. AI today is huge — it is already a robust industry,” he said.

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LICENSED social media platforms recorded a 96% compliance rate with government-issued takedown orders since the Online Safety Act 2025 came into force on Jan 1, according to Communications Minister Datuk Fahmi Fadzil.

“Under Act 866, the Malaysian Communications and Multimedia Commission (MCMC), among others, is empowered to issue written directions to licensed service providers to remove online content deemed harmful as defined under the act.

“Failure to comply with such written directions constitutes an offence punishable by a fine of up to RM1 million. 

“A further daily fine of up to RM100,000 may also be imposed for each day (or part thereof) that the offence continues after conviction,” he said in a written parliamentary reply last night.

As of Jan 27, 2026, Putrajaya issued a total of 25 takedown requests to service providers for various offences under the Act. Of these, he said 24 pieces of content, or 96% “were removed”.

However, Fahmi did not specify the type of content for which takedown orders were issued, an English daily reported.

He added that for offences involving non-compliance with obligations under Part III of the Act 866, may result in financial penalties of up to RM10 million, including for failures to reduce exposure to harmful content, protect child users and render priority harmful content inaccessible.

Fahmi was responding to a question from Datuk Dr Richard Rapu @ Aman Begri (GRS–Betong).

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META Platforms Inc.’s better-than-expected sales outlook helped ease Wall Street concerns about plans for unprecedented spending on artificial intelligence this year. 

The social networking giant topped projections for holiday quarter revenue and gave a strong forecast for the current period during its earnings report Wednesday. Improvements in its online advertising business are making it possible for Meta to spend hundreds of billions of dollars over the next few years on AI infrastructure. Meta’s shares jumped more than 11% in extended trading. 

Meta projected record spending for 2026, driven by Chief Executive Officer Mark Zuckerberg’s aggressive campaign to amass the infrastructure, computing power and talent that he deems necessary to win a competitive AI race. Zuckerberg has said his strategy centers on “front-loading” computing capacity in preparation for reaching the company’s goal of superintelligence, a theoretical milestone at which point AI can meet or outperform humans at many tasks.

To get there, Meta is spending aggressively. The company estimated that full-year capital expenditures will be between $115 billion and $135 billion, exceeding the $110.6 billion average analyst estimate, according to data compiled by Bloomberg. If Meta hits the top-end of that range, it will mean a jump of roughly 87% from 2025, a record year in which cap-ex topped $72 billion. 

Speaking on a call with investors, Zuckerberg said to look forward to “a major AI acceleration” that’s been brewing within the tech industry for over a year. After an overhaul of Meta’s AI program in 2025, Zuckerberg said Meta will soon release new models and products, though the Facebook founder’s near-term expectations were uncharacteristically subdued: “I expect our first models will be good, but more importantly, we’ll show the rapid trajectory that we’re on,” he said. He reiterated during the call that Meta’s upcoming models may not wow at launch, but will improve meaningfully over time. 

To finance these expensive projects, Meta is leaning heavily on its advertising business. The owner of Facebook, Instagram and WhatsApp said first-quarter sales will be $53.5 billion to $56.5 billion, beating the $51.3 billion average analyst estimate. Chief Financial Officer Susan Li spent much of her time on the call talking about ways that Meta’s AI investments are helping the company better target ads and give users more personalized content recommendations, which keeps them scrolling. 

Investors have historically been anxious about whether Meta’s businesses will benefit meaningfully from its hefty AI investments. “Meta’s lack of model capabilities vs. frontier large language models leaves uncertainty around monetization of its AI investments compared with hyperscale cloud peers,” Bloomberg Intelligence analyst Mandeep Singh said in a note last week. 

But those concerns were tamed on Wednesday. The social media giant reported fourth-quarter sales of $59.9 billion, beating the $58.4 billion that Wall Street expected on average. It was a sign that while spending is up, the core business supporting those investments is also growing faster than expected. 

Investors were less forgiving of Microsoft Corp., which saw shares tumble after unveiling a similarly ambitious 2026 spending outlook on Wednesday.

AI Investment 

Meta’s AI investment strategy hasn’t always been well received. Back in October, when Li warned investors that 2026 capital expenditures were expected to be “notably larger” than in 2025, some investors got spooked and shares fell by as much as 14%. The concern remains that Meta’s spending may not lead to a meaningful new business line. On the call Wednesday, Zuckerberg was asked on multiple occasions to talk about his vision for an AI business, but kept his answers vague, promising to share more as the year goes on. 

That hot-and-cold reaction from Wall Street has not slowed Zuckerberg. The Meta CEO has committed publicly, including at a high-profile White House dinner, to spend $600 billion in the US by 2028 to support AI technology, infrastructure and workforce expansion. Li, speaking on the Wednesday earnings call, added that Meta will continue to seek external financing for some of its infrastructure projects.

These investments are in service of long-term objectives, Zuckerberg said. “I think we have the most talent dense research effort in the industry and some of the early indicators look positive,” he told investors. “But look, I think that this is a long-term effort.” 

Despite Meta’s strong quarterly results Wednesday, Matt Britzman, an analyst at Hargreaves Lansdown, said the “real headline is the relentless ramp” in capital expenditures. “It wouldn’t be surprising to see the share reaction cool as investors absorb those aggressive investment plans,” he said. 

Though Meta’s advertising business will help it weather some of the AI uncertainties, a separate unit continued its considerable losses. Reality Labs, Meta’s unit focused on virtual reality and AI-enabled hardware, posted $955 million in fourth-quarter sales, and an operating loss of more than $6 billion for the fourth quarter. That brought its total losses to more than $19 billion for 2025. 

Zuckerberg told investors that those losses won’t continue forever. “I expect Reality Labs losses this year to be similar to last year, and this will likely be the peak as we start to gradually reduce our losses going forward,” he said.

Earlier this month, Meta cut about 10% of staff across Reality Labs as part of a move to shift resources away from some of the virtual reality products and into more AI-focused ventures, including AI wearables, like the Ray-Ban Meta glasses. –BLOOMBERG

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MICROSOFT Corp.’s spending surged to a record high and cloud sales growth slowed, sending the shares down sharply amid investor concerns that it could take longer than expected for the company’s AI investments to pay off.

Capital expenditures for the fiscal second quarter hit $37.5 billion, up 66% from a year earlier and exceeding analyst estimates for $36.2 billion.

The Azure cloud-computing unit posted a 38% revenue gain during the quarter when adjusting for currency fluctuations, just meeting analysts’ projections. That growth rate slowed — by a percentage point — from the prior quarter. The company expects Azure sales to rise 37% to 38% in the current quarter.

Microsoft shares fell about 7% in extended trading after closing at $481.63 in New York.

“One of the core issues that is weighing on investors is cap ex is growing faster than we expected, and maybe Azure is growing a little bit slower than we expected,” Morgan Stanley analyst Keith Weiss said during an analysts’ call. Investors, he said, were concerned about the return on that spending.

Chief Financial Officer Amy Hood responded by saying that a chunk of cloud capacity is going toward internal teams, which boosts products such as Copilot. Had all of the new capacity gone toward Azure, the growth rates would have been notably higher, she said.

The world’s largest software maker has experienced rapid growth in its cloud computing business, thanks in part to a landmark partnership with leading artificial intelligence startup OpenAI. But despite spending heavily on data centers, Microsoft has struggled to get capacity online quickly enough to meet demand.

Microsoft has been rushing to bake AI tools, including those powered by OpenAI, into its products, betting that chatbots and automation technology will boost sales of the company’s productivity software and cloud services.

During the analyst call, Microsoft Chief Executive Officer Satya Nadella said companies are now paying for 15 million subscriptions to the M365 Copilot, Microsoft’s main AI tool for office workers. Adoption is growing among the company’s enormous base of corporate users, Nadella said.

Total sales increased 17% to $81.3 billion during the quarter, while profit was $5.16 a share, the company said in a statement on Wednesday. The net income figure was boosted by gains from Microsoft’s investment in OpenAI, which lifted per-share earnings by $1.02.

Analysts had expected sales of $80.3 billion and per-share earnings of $3.92. 

The value of commitments from customers that Microsoft expects to materialize as sales in future years more than doubled from a year earlier, primarily the result of a new, $250 billion deal with OpenAI. The startup accounted for 45% of Microsoft’s backlog, which stood at $625 billion at the end of December.

Microsoft is the first of the Big Three cloud services companies to report quarterly financial results this year. Alphabet Inc. is scheduled to release its earnings on Feb. 4, Amazon.com Inc. the following day.

Meanwhile, Meta Platforms Inc. got a more positive investor reception after saying it’s spending more than anticipated to build out its AI business. As part of its quarterly earnings report Wednesday, Meta, the owner of Facebook, said full-year capital expenditures will be $115 billion to $135 billion, exceeding the $110.6 billion average analyst estimate — and the shares jumped about 7% in extended trading. –BLOOMBERG

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