US companies expect slower profit growth as AI investment spending increases

Federal Reserve official Mary Daly has warned that the U.S. labor market has reached a "worrisome" point as job growth slows. She indicated this weakness strengthens the case for interest rate cuts in coming months, noting that labor markets tend to deteriorate further once they begin weakening. The Fed faces additional challenges with a government shutdown delaying critical economic data releases. Meanwhile, companies are increasingly turning to artificial intelligence technologies for productivity gains as the labor market cools. Markets expect another rate cut at the Fed's October meeting as officials balance inflation concerns against employment risks.

U.S. companies anticipate slower profit growth, prompting a strategic shift toward AI investments. As businesses navigate economic challenges, they're increasingly adopting AI technologies to enhance efficiency, reduce costs, and maintain competitiveness. AI applications span customer service, supply chain management, and product development, positioning these technologies as critical tools for companies seeking to optimize operations during economic uncertainty. Despite cautious profit outlooks, organizations view AI integration as essential for long-term success in a challenging financial landscape.

Former UK Prime Minister Rishi Sunak has taken part-time advisory roles at both Microsoft and AI startup Anthropic. He will provide strategic insights on global economic and political trends affecting technology and innovation. Sunak won't personally profit from these positions, with all earnings going to his charity The Richmond Project. He remains an MP while serving in these advisory capacities.

Nvidia has led a $2 billion investment round in Reflection AI, valuing the AI infrastructure startup at $8 billion. This reflects a major industry shift from focusing on model training to developing the infrastructure needed for enterprise AI deployment. Founded by former DeepMind and OpenAI researchers, Reflection AI is creating scalable systems for AI deployment, including their Asimov research agent for automating coding tasks. Nvidia's $250 million contribution strengthens its position in the AI supply chain, similar to Microsoft's OpenAI partnership. With enterprises allocating about 10% of IT budgets to AI and infrastructure gaps remaining a key adoption barrier, this investment represents part of over $25 billion in global AI infrastructure funding in Q2 2025. Reflection AI's founders aim to build AI agents that surpass human programmers, with Nvidia's support critical for achieving enterprise-scale implementation.