Tech trends Q2 2025: Terminal velocity
Tech companies are approaching terminal velocity on capex, which will surpass a $500 billion annual run-rate in early 2026. Apple is out of position on AI; CEO Tim Cook has signalled a willingness to consider M&A yet also faces acute political strain in the US
Despite revenues surpassing $2 trillion in 2025, tech is in a fragile transition as most cloud growth is still not driven by gen AI—tariffs, uneven compute build-out and US economic impacts may deliver a bumpy landing in quarters ahead
European tech sovereignty is a mounting political issue, as the continent fights the White House on its regulatory red lines. The financial and cultural impacts of Europe’s lack of tech champions remain intractable
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Enormous AI capacity unlocked by 2026, combined with investor pressure for returns, is stimulating a rapid escalation in AI products that could spawn an AI ‘super app’ ecosystem that supplants the world of search and links
There is no turning back: Google is transforming search and YouTube while OpenAI and Perplexity launch AI browsers to capture user attention. OpenAI’s ChatGPT agent moves it further from Microsoft, who is yet to finalise their long-term relationship
Meta may pivot to a closed AI model without an ‘anchor tenant’—feeding Mark Zuckerberg’s ambition to revolutionise advertising. Meta is positioning new AI supercharged hardware in the consumer space designed to eclipse the smartphone
Publishers are becoming less visible. Since 2019, publisher visibility on Google’s search results has diminished markedly—the Mail is less than half as visible in Google’s search results as it was five years ago.
Since March, publishers' keywords have become over three times more likely to trigger an AI Overview, now affecting around one-third of the Sun and Mirror’s keywords. These summaries mostly appear for entertainment and informational queries, which typically have high search volumes but lower click-through rates
The commercial impact is minimal—we estimate low-single digits—for now. The main threat is to discoverability, and the shrinkage of the top of the funnel
Tech quarterly: Dark side of the boom
15 May 2025US tariffs and regulations are sparing no one in 2025—Microsoft, the ‘winner’ of the earnings quarter, is still making plans to protect its European business in a doomsday scenario.
Hyperscalers who have piled their eggs into cloud cannot afford a misstep—this is driving record capex to satisfy cloud demand. We expect to see lumpiness in Q2-Q3, feeding investors’ worries.
Revenue impacts have been felt first at US retail, softening ad demand, with the UK relatively protected for now. Despite relief at the 90-day ‘reset’ with China, economic and political uncertainty remains the story of the year.
AI’s defining year: Capex and capabilities surge
20 February 2025US big tech companies are deploying hundreds of billions of dollars to remake the global economy in their image, as enviable growth contrasts with layoffs and low morale.
The cost of using AI models will fall in 2025 and make more AI applications possible. Regulation is caught between pressure from Trump and investigations that must go on, such as digital markets.
Microsoft and Google have tied their fortunes to AI. Amazon and Meta stand to realise business gains from AI, while Apple is the outlier: capex declined in 2024 as it focuses on iPhone and services.
Enormous AI capacity unlocked by 2026, combined with investor pressure for returns, is stimulating a rapid escalation in AI products that could spawn an AI ‘super app’ ecosystem that supplants the world of search and links
There is no turning back: Google is transforming search and YouTube while OpenAI and Perplexity launch AI browsers to capture user attention. OpenAI’s ChatGPT agent moves it further from Microsoft, who is yet to finalise their long-term relationship
Meta may pivot to a closed AI model without an ‘anchor tenant’—feeding Mark Zuckerberg’s ambition to revolutionise advertising. Meta is positioning new AI supercharged hardware in the consumer space designed to eclipse the smartphone
Publishers are becoming less visible. Since 2019, publisher visibility on Google’s search results has diminished markedly—the Mail is less than half as visible in Google’s search results as it was five years ago.
Since March, publishers' keywords have become over three times more likely to trigger an AI Overview, now affecting around one-third of the Sun and Mirror’s keywords. These summaries mostly appear for entertainment and informational queries, which typically have high search volumes but lower click-through rates
The commercial impact is minimal—we estimate low-single digits—for now. The main threat is to discoverability, and the shrinkage of the top of the funnel
Tech quarterly: Dark side of the boom
15 May 2025US tariffs and regulations are sparing no one in 2025—Microsoft, the ‘winner’ of the earnings quarter, is still making plans to protect its European business in a doomsday scenario.
Hyperscalers who have piled their eggs into cloud cannot afford a misstep—this is driving record capex to satisfy cloud demand. We expect to see lumpiness in Q2-Q3, feeding investors’ worries.
Revenue impacts have been felt first at US retail, softening ad demand, with the UK relatively protected for now. Despite relief at the 90-day ‘reset’ with China, economic and political uncertainty remains the story of the year.
AI’s defining year: Capex and capabilities surge
20 February 2025US big tech companies are deploying hundreds of billions of dollars to remake the global economy in their image, as enviable growth contrasts with layoffs and low morale.
The cost of using AI models will fall in 2025 and make more AI applications possible. Regulation is caught between pressure from Trump and investigations that must go on, such as digital markets.
Microsoft and Google have tied their fortunes to AI. Amazon and Meta stand to realise business gains from AI, while Apple is the outlier: capex declined in 2024 as it focuses on iPhone and services.