The burgeoning demands of generative AI are fundamentally reshaping the competitive landscape of cloud computing, compelling even market leaders like Amazon to critically assess their strategic investments. CNBC’s MacKenzie Sigalos, reporting on Amazon’s third-quarter earnings, underscored that the company’s cloud momentum and substantial AI infrastructure spending are now under intense scrutiny, with investors eager to […]
Stripe, under the leadership of Emily Glassberg Sands, Head of Data & AI, is not merely adapting to the artificial intelligence revolution; it is actively constructing the financial infrastructure upon which this burgeoning agent economy will operate. In a recent Latent Space podcast interview with hosts Shawn Wang and Alessio Fanelli, Sands articulated Stripe’s ambitious […]
Amazon just opened Project Rainier, one of the world’s largest AI compute clusters, in partnership with Anthropic.
Amazon’s third-quarter profits rose 38% to $21.2 billion, but a big part of the jump had nothing to do with its core businesses of selling good or cloud services.
The company reported a $9.5 billion pre-tax gain from its investment in the AI startup Anthropic, which was included in its non-operating income for the quarter.
The windfall wasn’t the result of a sale or cash transaction, but rather accounting rules. After Anthropic raised new funding in September at a $183 billion valuation, Amazon was required to revalue its equity stake to reflect the higher market price, a process known as a “mark-to-market” adjustment.
To put the $9.5 billion paper gain in perspective, the Amazon Web Services cloud business — historically Amazon’s primary profit engine — generated $11.4 billion in quarterly operating profits.
At the same time, Amazon is spending big on its AI infrastructure buildout for Anthropic and others. The company just opened an $11 billion AI data center complex, dubbed Project Rainier, where Anthropic’s Claude models run on hundreds of thousands of Amazon’s Trainium 2 chips.
Amazon spent $35.1 billion on property and equipment in the third quarter alone, up 55% from a year earlier. Andy Jassy, the Amazon CEO, sought to reassure Wall Street that the big outlay will be worth it.
“You’re going to see us continue to be very aggressive investing in capacity, because we see the demand,” Jassy said on the company’s conference call. “As fast as we’re adding capacity right now, we’re monetizing it. It’s still quite early, and represents an unusual opportunity for customers and AWS.”
The cash for new data centers doesn’t hit the bottom line immediately, but it comes into play as depreciation and amortization costs are recorded on the income statement over time.
And in that way, the spending is starting to impact on AWS results: sales rose 20% to $33 billion in the quarter, yet operating income increased only 9.6% to $11.4 billion. The gap indicates that Amazon’s heavy AI investments are compressing profit margins in the near term, even as the company bets on the infrastructure build-out to expand its business significantly over time.
Those investments are also weighing on cash generation: Amazon’s free cash flow dropped 69% over the past year to $14.8 billion, reflecting the massive outlays for data centers and infrastructure.
The market’s patience for capital expenditure, particularly in the burgeoning field of artificial intelligence, has become a defining factor in big tech’s recent earnings reactions. This sentiment was acutely underscored when Eric Sheridan, Goldman Sachs’ Co-Head of Tech, Media, and Telecom Research, joined CNBC’s “Squawk on the Street” team to dissect the third-quarter earnings of […]
The burgeoning demand for data center capacity, fueled by the insatiable appetite for artificial intelligence and cloud computing, is encountering a significant impediment: a critical shortage of skilled labor. CNBC’s Kate Rogers reported on this burgeoning issue, highlighting how the construction and operational needs of these vital infrastructure hubs are being hampered by a lack […]
“I do not believe we’re in an AI bubble today,” declared Gavin Baker, Managing Partner and CIO of Atreides Management, setting a provocative tone for his discussion with David George, General Partner at a16z. This assertion, delivered at a16z’s Runtime event, anchored a sharp analysis of the current AI boom, differentiating it starkly from past […]
The relentless ascent of artificial intelligence, alongside the broader push for electrification, is forging an unprecedented demand for power, a trend that Valérie Noël, Head of Trading at Syz Group, highlights as a potent catalyst for uranium miners. This insight, delivered during her recent interview on CNBC’s *Worldwide Exchange* with anchor Frank Holland, underscored a […]
Sam Altman, joined by Chief Scientist Jakub Pachocki and co-founder Wojciech Zaremba, recently unveiled OpenAI’s ambitious strategic reorientation and product roadmap, signaling a profound shift in the company’s approach to artificial general intelligence (AGI) development and deployment. The presentation, delivered directly to an audience of founders, VCs, and AI professionals, outlined a future where AGI […]
“I’ve seen nothing like this. I’m fairly certain no one’s seen anything like this. The Internet in the late 90s, early 2000s was big… this makes it… 10x is an understatement. It’s 100x what the Internet was.” This stark assessment by Amin Vahdat, VP and GM of AI and Infrastructure at Google, encapsulates the central […]
The burgeoning artificial intelligence landscape, characterized by unprecedented infrastructure buildout and escalating capital expenditure, is creating both immense opportunities and significant strategic challenges for the world’s leading tech companies. This dynamic was a central theme in a recent CNBC discussion where Alex Kantrowitz, Founder of Big Technology and CNBC contributor, provided incisive commentary on Nvidia’s […]
Amazon’s latest $11 billion AI data center in Indiana signals a profound shift in the foundational infrastructure powering the artificial intelligence revolution, an investment of unprecedented scale that underscores the intense competition for AI compute. In less than a year, Amazon transformed vast Indiana cornfields into its largest AI data center yet, an astonishing feat […]
NVIDIA BlueField-4 is poised to redefine AI infrastructure, offering unprecedented compute power, 800Gb/s throughput, and advanced security for gigascale AI factories.
NVIDIA's Omniverse DSX blueprint provides a standardized, energy-efficient framework for designing and operating gigawatt-scale AI factories, directly addressing AI energy consumption.
NVIDIA's AI Factory for Government provides a secure, full-stack AI reference design, enabling federal agencies to deploy mission-critical AI with stringent security.
NVIDIA's GTC Washington, D.C., keynote unveiled a strategic blueprint for America's AI future, emphasizing national infrastructure, physical AI, and industry transformation.
NVIDIA is driving significant AI economic development across the US by partnering with states, cities, and universities to democratize AI access and foster innovation.
Microsoft’s staggering ten-fold return on its OpenAI investment, now valued at $135 billion, signals a new era where strategic AI stakes redefine corporate power and valuation. This monumental gain, highlighted by CNBC’s MacKenzie Sigalos, follows a significant corporate restructure at OpenAI that redefines its partnership terms with Microsoft, granting the tech giant a 27% equity […]
The burgeoning demand for artificial intelligence, a computational arms race among hyperscalers, has illuminated a critical bottleneck: access to reliable, scalable power. This very challenge, as discussed by CleanSpark CEO Matthew Schultz with CNBC’s Jordan Smith, is precisely where Bitcoin miners like CleanSpark find their strategic advantage. Their conversation unveils a nuanced pivot, not merely […]
Enterprises can now deploy large-scale AI inference with FriendliAI’s optimized stack on Nebius AI infrastructure, combining top performance with cost efficiency.
Michael Kagan, CTO of Nvidia and co-founder of Mellanox, recently engaged in a candid discussion with Sonya Huang and Pat Grady at Sequoia’s Europe100 event, offering profound insights into Nvidia’s meteoric rise as the architect of AI infrastructure. His commentary illuminated the pivotal role of the Mellanox acquisition in transforming Nvidia from a mere chip […]
“Infrastructure is destiny,” declared James Hairston, Head of International Policy & Partnerships for Asia, Africa, & Latin America at OpenAI, encapsulating the strategic imperative facing Southeast Asia in the burgeoning age of artificial intelligence. This powerful statement set the stage for a compelling discussion at the Bloomberg Business Summit at ASEAN in Kuala Lumpur, where […]
AMD's strategic divestiture of ZT Systems' manufacturing, while retaining design expertise, sharpens its focus on integrated AMD rack-scale AI solutions.
Tejas Dessai, Director of Research at Global X ETFs, recently shared a compelling outlook on CNBC’s Worldwide Exchange, emphasizing that the trajectory of the AI trade through 2026 will be largely dictated by the capital expenditure (CAPEX) guidance and AI revenue acceleration from hyperscalers. “This week could set the tone for the AI trade going […]
Anthropic is making a multi-billion dollar bet on Google Cloud TPUs, securing one million chips to fuel Claude's growth and intensify the AI compute race.
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