Below is a roundup of last week’s notable industry news, with summaries and our opinions. More Q4 earnings and some clarity on winners and losers…

Amazon (👎): Revenue was up 14% to $213.4B, beating estimates. Ad revenue was up 22% to $21.3B. AWS revenue was up 24% to $35.6B, beating estimates and posting its fastest growth in 13 quarters. Amazon will spend $200B on AI in 2026, far exceeding Wall Street's $148.86B estimate. Investors worry about long-term ROI on that expenditure. Shares fell 11%.

Alphabet (👎): Revenue was up 18% to $113.8B, beating estimates. Ad revenue was up 13.5% to $82.3B, but YouTube ad revenue ($11.4B) fell short of expectations. Google Cloud revenue surged 48% to $17.7B, beating estimates. Alphabet will more than double AI spending to $175B-$185B in 2026, stunning Wall Street. Shares fell 3% in extended trading.

Reddit (👍): Revenue was up 70% to $726M, beating estimates. Ad revenue was up 75% to $690M, and up 74% to $2.1B for the entirety of 2025. Daily active users were up 19% to 121.4M. Reddit announced a $1B share repurchase program. The stock is down 38% in the past month amid a broader social media sell-off, but Reddit shares rose 5% on the earnings report.

Snap (👍): Revenue was up 10% to $1.72B, beating estimates. Total active advertisers increased 28%. Daily active users fell 3M from last quarter to 474M.  Snap+ subscribers rose 71%. Snap announced a $500M share repurchase program. Q1 revenue guidance missed estimates. Shares rose 2% in after-hours trading.

Spotify (👍): Revenue was up 13% to $5.39B, beating estimates. Monthly active users grew 11% to 751M, driven by growth in Latin America and Europe. Ad-supported users reached 476M. Premium subscribers grew 10% to 290M. Current quarter revenue guidance missed estimates, but shares popped 15%.

LiveRamp (👍): Revenue was up 9% to $212M, beating estimates. Net profit was $40M, up from $12M in Q4 2024, with “record operating margins.” CEO Scott Howe addressed investor concerns about AI disrupting the SaaS model, arguing AI is "a tailwind, not a headwind" for LiveRamp's data collaboration platform. Shares rose by single digits.

MNTN (👍): Revenue was up 36% to $87.1M for the CTV buying platform, beating estimates. MNTN turned profitable with $34.5M in net income vs. a $4M loss last year. MNTN attributed gains to AI, including an AI-powered targeting product and video creator, with an AI-driven media planning tool coming next. Shares popped as much as 46% in after-hours trading but have since come back down.

Fox (👎): Revenue was up 2% to $5.18B, beating estimates. Ad revenue was up 1%, boosted by a seven-game baseball World Series and higher sports and news pricing. Fox News and Tubi showed continued strength, but sports rights are eating into profits. Shares fell 3.6%. 

New York Times (👎): Revenue was up 10% to $802.3M, beating estimates. The Times added 450K digital-only subscribers, reaching 12.78M total subscribers. Digital ad revenue was up 25%. Current quarter guidance was solid, but investors are concerned about rising operating costs. Shares fell 6%🔒.

IAC/People (🤷): Revenue was down 10% to $646M, beating estimates. People's revenue was down 2%, but its digital revenue was up 14% to $355M, its highest growth rate in five quarters. People has lost 50% of its Google search traffic in the last two years. Shares rose before losing ground.

Opinion: Last week we said "AI giveth, but more so, AI taketh." This week proved that AI can taketh, and quite spectacularly.

Alphabet and Amazon both beat estimates with strong core growth. Yet Alphabet dropped 3% and Amazon plummeted 11%. The reason? AI spending so astronomical Wall Street can't see a path to reasonable returns. Alphabet is more than doubling AI spend to $175B-$185B in 2026. Amazon will spend $200B. Those levels make Meta’s $115B-$135B AI investment look small!

Meanwhile, companies without massive AI infrastructure bets—Reddit (+5%), Snap (+2%), Spotify (+15%), LiveRamp (+9%)—saw stocks rise despite mixed results. The market is favoring steady, profitable growth over AI moonshots.

The market is also liking “AI front-end” companies that are using AI as a tool for profits today, not infrastructure for maybe-returns tomorrow. MNTN's revenue jumped 36% and turned profitable. Meta positioned AI as a revenue driver for its ads business. People lost 50% of Google search traffic but grew digital revenue 14% by licensing content to AI companies and building direct audiences.

We have been calling AI infrastructure companies "AI earners" and AI front-end companies "AI burners" until now. But now AI infrastructure has become so expensive and competitive, with such distant payoffs, while the AI front-end is finally generating clear and present value at a much lower cost.

AI earners and AI burners have flipped!

ChatGPT ads go live with Omnicom, WPP, Dentsu, Target, and 30+ brands in pilot program - OpenAI began rolling out ads to US users on free and Go tiers, with major players already testing including Target and Adobe, as well as multiple clients from agency holding companies like Omnicom, WPP, and Dentsu. OpenAI has received a lot of flak since it announced it would test ads in ChatGPT in mid-January, including Super Bowl commercials from rival Anthropic that mocked ads in AI. To help OpenAI scale ads while maintaining trust, OpenAI is building an "ads integrity team"🔒from scratch to ensure ads show up "responsibly" in ChatGPT. OpenAI insists that ads won't influence ChatGPT's answers and will be clearly labeled as sponsored, matched to conversation topics, with advertisers only receiving aggregate performance data. 

OpenAI models could help power Alexa as part of $50B Amazon investment deal - Amazon and OpenAI have been negotiating a $50B investment that could include Amazon using OpenAI's models in Alexa and other internal projects, while OpenAI would use Amazon's AI chips and compute. Amazon currently uses rival Anthropic's Claude model to handle many of Alexa+'s more complex queries and has invested $8B in Anthropic. For OpenAI, the partnership is viewed as more strategically valuable than its existing Apple Siri deal, as it fits better with OpenAI's broader enterprise push to ramp up a devices business that could one day compete with Apple. OpenAI is hoping to raise $100B as it continues to burn through cash. 

Instagram is internally testing a new Snapchat rival app🔒- Instagram's new standalone app for sending disappearing photos, called "Instants". Sounds an awful lot like Snapchat's original premise. Instagram is testing an Instants feature within its main app that lets users quickly send disappearing photos in DMs. This is just the latest in Meta's long history of borrowing from Snapchat—Instagram famously cloned Snapchat Stories in 2016 and launched a social map feature similar to Snap Map last year. The move is part of Meta's broader shift toward more private sharing as people post less frequently to the main feed and instead share content directly in DMs with friends and family.

Lego is building out an in-house programmatic team🔒- The toymaker posted five programmatic positions in January to build an in-house digital paid media team alongside its media agency Publicis.

Amazon expands sports ad playbook heading into upfront🔒- Campaigns that include multiple Prime Video sports are generating 24% higher interaction rates than single-sport campaigns. 

Reports: WPP's next restructuring move will realign creative agencies - Ogilvy, VML, and AKQA will operate under a single banner called WPP Creative. It follows last year's restructuring that consolidated Mindshare, Wavemaker, EssenceMediacom, and GroupM into a new entity called WPP Media.

Liftoff Mobile postpones IPO amid tech stock slump - The mobile ad tech platform was supposed to determine its official offer price for its shares last week, but tech stock jitters kiboshed the IPO. 

Scope3 cuts engineering and sales staff in second round of layoffs in 5 months🔒- The brand safety AI startup continues to tweak its commercial and engineering teams as it pivots towards building agent-to-agent media infrastructure. 

Washington Post lays off one-third of its newsroom - The sad bloodbath continues, with WaPo cutting 400 people over the last three years.

From Svedka to Anthropic, brands make bold plays with AI in Super Bowl ads - None of them really landed, though…

The U of Digital Weekly Newsletter is intended for subscribers, but occasional forwarding is okay!

To subscribe visit Uof.Digital/Newsletters or contact us directly for group subscriptions.

And remember, U of Digital helps teams drive better outcomes through structured education on critical topics like programmatic, privacy / identity, CTV, commerce media, AI, and more. Interested in learning more about how we can supercharge your team?