Amazon wants to be the king of AI cloud computing and become the first $1 trillion revenue business. But to do that it will have to continue on its capex spending spree, its CEO said Thursday.
Avi Saxena, left, and Tyler Whitworth. (LinkedIn Photos)
— Two former Amazon executives who helped build Discovery’s direct-to-consumer operation in Bellevue, Wash., are stepping down from their leadership roles following the company’s acquisition by Paramount Skydance. They will remain in advisory roles during the transition.
Avi Saxena joined Discovery in 2019 as chief technology officer of its direct-to-consumer business and led its new Bellevue office. He became CTO of Warner Bros. Discovery (WBD) following Discovery’s 2022 merger with AT&T’s WarnerMedia business. Paramount Skydance completed its acquisition of WBD on Oct. 6, with the combined company taking the name Skydance Corporation.
Before joining Discovery, Saxena was with Amazon for 19 years over two stints, most recently as vice president of technology for Amazon Marketplace. He also held leadership roles at Microsoft and internet infrastructure startups.
Tyler Whitworth is stepping down as executive vice president and chief product officer for WBD’s streaming business. He led teams working on digital products for HBO Max, discovery+, Eurosport, TNT Sports, Food Network and others. Before joining Discovery, he spent more than seven years at Amazon, leading teams developing products and services for customers and third-party sellers.
Dane Glasgow, Skydance’s chief product officer, announced the departures of Whitworth, Saxena and WBD Chief Information Officer Dave Duvall in a memo shared with GeekWire.
“Much of the strength of WBD’s product and technology organizations reflects their leadership and dedication. Please join me in thanking them and wishing them the very best,” Glasgow wrote.
The company has not responded to GeekWire’s inquiries about the future of the Bellevue office.
Bahadir Onalan. (LinkedIn Photo)
— Bahadir Onalan is returning to Microsoft as a vice president in its CoreAI organization, focused on responsible AI, after nearly 10 years at Amazon. Onalan first joined Microsoft in 2005 and worked on Azure teams focused on search, analytics, business intelligence and security. He left in 2017 as a principal software group engineering manager to join Amazon, where he worked on machine learning initiatives.
“This second tenure feels like a true homecoming,” Onalan wrote. “Our goal goes beyond shipping a platform or a product; we are here to define the global standards for AI safety.”
Naria Santa Lucia. (LinkedIn Photo)
— Naria Santa Lucia is leaving Microsoft after seven years, most recently as a general manager with Microsoft Elevate. She previously served as executive director of the Washington State Opportunity Scholarship.
“I’ll carry the lessons I learned from my time at Microsoft as I continue my personal and professional mission to serve people and communities by teaching, advising nonprofits and mission driven organizations, and spreading joy and human connection,” Santa Lucia wrote.
She did not announce a specific next role.
Leo Ochoa, left, and Aina Abiodun. (LinkedIn Photos)
— VertueLab, a Pacific Northwest nonprofit supporting climate tech entrepreneurs, has named Leo Ochoa executive director, promoting him from managing director for Oregon. He succeeds Aina Abiodun, who is transitioning to chair of the organization’s board after more than three years as executive director.
“Leo brings a unique blend of vision, relationships, and entrepreneurship experience,” the organization said, noting his background as a wildland firefighter, startup founder and patent holder for wearable safety gear.
Abiodun’s accomplishments include co-creating the Seattle Climate Innovation Hub, launching the Opalene Climate Challenge and helping lead the Just Future Climate Labs initiative.
Leah Sardone. (LinkedIn Photo)
— Seattle’s Pulse Space has appointed Leah Sardone as vice president of engineering. The startup is developing laser-based systems to deliver power and enable long-distance communications in low Earth orbit and beyond. In July, the company announced a $40 million U.S. Space Force contract to advance its laser-based space power technology.
Sardone brings more than 23 years of experience in hardware, sensors and embedded systems development. She joins Pulse Space from IonQ, where she most recently served as director of quantum networking and interconnects. Her previous employers include Lockheed Martin, Northrop Grumman, Honeywell Aerospace, Blue Origin and Amazon’s Project Kuiper, now known as Amazon Leo.
Michał Jastrzębski. (LinkedIn Photo)
— Caravel Bio a Portland, Ore., startup developing technology to rapidly test newly designed proteins, has announced Michał Jastrzębski as its CTO. The company says its platform can screen millions of protein designs in parallel at low cost, helping identify promising candidates for applications in human health, pollution reduction and industrial processes.
Caravel also announced a nearly $1.25 million Small Business Innovation Research Phase II grant from the National Science Foundation to further develop the platform.
Jastrzębski previously served as a principal machine learning engineer at Ginkgo Bioworks. His past employers also include GitHub and Intel.
— Darick Baker has been appointed the director the University of Washington’s Washington Nanofabrication Facility, which the UW describes as “the largest publicly accessible nanofabrication facility and cleanroom in the Pacific Northwest.” Baker joined the facility in 2012 as a research engineer and has served as acting director since 2025. He previously worked at the Colorado School of Mines
— Technology Alliance announced that Stoke Space director of communications Kyra Jorgensen has joined its board. Jorgeson recently joined the space startup from the fusion company Helion Energy.
AWS now brings in revenue at a $184 billion annual pace, and it’s closing in on Amazon’s third-party seller business as the company’s second-largest source of sales. (GeekWire File Photo / Todd Bishop)
Amazon Web Services revenue grew 39% to $46 billion in the third quarter, its fastest pace in nearly five years, and Amazon CEO Andy Jassy said he expects the cloud unit to top 40% growth in both 2027 and 2028.
That wasn’t enough for investors. Amazon posted earnings of $1.89 per share, well short of the $1.97 analysts expected, as higher interest costs on its growing debt and other losses ate into its profit, even though its operating income beat expectations.
Revenue of $201.9 billion, up 12%, came in just under estimates. Shares fell more than 7% in after-hours trading, after closing down 4% during the regular session.
Update: On the earnings call, Jassy said AWS has a backlog of $578 billion in contracted future revenue, more than double a year earlier. He also said Amazon expects to spend “meaningfully more” on capital projects in 2027 than the roughly $220 billion it plans for this year.
Amazon may need to count on its legendary willingness to be “misunderstood for long periods of time,” as it asks investors to look past the costs to where its biggest businesses are headed.
In the company’s earnings release, Jassy said Amazon’s retail business is gaining market share with improving margins. Retail sales, including online stores, physical stores and third-party seller services, totaled nearly $500 billion over the past 12 months, and AWS is now at a $184 billion annual revenue run rate.
“There has never been a trillion dollar revenue business, and we may have two of them in the next 5-10 years,” he said.
On the earnings call, Jassy said those two businesses are AWS and Amazon’s stores business.
Advertising grew 11% to $19.6 billion, or 12% excluding currency changes, down from 22% on that basis a year earlier. Amazon blamed the timing of Prime Day and a few other factors, and said it expects ad growth to return to the high teens in the fourth quarter.
Online stores grew 2% to $68.5 billion, held back by Prime Day moving into the second quarter this year. Amazon said overall revenue growth would have been about 4 percentage points higher without the shift.
Third-party seller services, the fees Amazon collects from merchants on its site, grew 9% to $46.5 billion. AWS came within about $500 million of it.
Subscription services, which includes Prime memberships, grew 11% to $14 billion.
Physical stores, mostly Whole Foods, grew 2% to $5.7 billion.
Outlook: Amazon expects fourth-quarter revenue of $240 billion to $247 billion, up 12% to 16%, and operating income of $28.5 billion to $33.5 billion.
Wall Street had expected fourth-quarter operating income of $33.2 billion, near the top of that range, according to analyst Dan Ives of Yorkville Ives. It still expects to spend about $220 billion on capital projects this year.
Amazon CFO Brian Olsavsky said on the earnings call that costs for Amazon Leo, the company’s satellite internet service, are weighing on its fourth-quarter profit forecast as the service gets ready to launch later this year.
Amazon’s free cash flow, the cash left over after capital spending, was negative $42.4 billion over the past 12 months, compared with positive $14.8 billion a year earlier, mostly because of its AI investments.
Amazon’s five new Alexa devices add cameras, sleep sensing, and smart-home features. Compare prices, Alexa+ requirements, compatibility, and privacy controls.
Amazon’s five new Alexa devices add cameras, sleep sensing, and smart-home features. Compare prices, Alexa+ requirements, compatibility, and privacy controls.
United Launch Alliance announced Wednesday it plans to return its Vulcan rocket to service on November 13, nine months after a solid rocket booster anomaly threw the company's 2026 launch schedule into oblivion.
The return-to-flight mission will launch 40 satellites for the Amazon Leo broadband constellation, the first of 38 Vulcan flights Amazon has booked to deploy the bulk of its network. The mission will lift off from Cape Canaveral Space Force Station, Florida, and ULA said the launch date is pending range approval.
The launch is critical for ULA after its new flagship rocket suffered nozzle failures on its solid rocket boosters on two of its first four missions, most recently during a flight in February. In both cases, the rocket overcame the nozzle failure and completed its mission, but officials at the US Space Force, ULA's primary customer, lost confidence in Vulcan.
Since debuting in 2019, Amazon's Echo Studio targeted users who wanted superior audio quality from their Alexa-based smart speaker. The latest Echo Studio adds another less-expected differentiator: an integrated camera.
The Echo Studio with Home Camera, released alongside a pile of other Alexa devices today, doesn’t have many audio upgrades over the standard Echo Studio. Each speaker has one 3.75-inch high-excursion woofer and three full-range drivers. They both support Dolby Atmos and Amazon’s proprietary algorithm for adding a surround sound-like effect to stereo audio. Per the devices’ product pages, the speakers have lossless HD audio, Advanced Room Adaptation, and features for fighting noise distortion. Amazon announced the Advanced Room Adaptaion today, saying that the feature “continuously tunes the sound to your space, automatically adapting to the room's acoustics.”
Both speakers have four-microphone arrays and the same AZ3 Pro processor that Amazon introduced a year ago. The processor has an AI accelerator for using Amazon's Alexa+ generative AI chatbot.
Hot on the heels of Apple’s HomeView launch, Amazon has unveiled a massive 16-inch Echo Show and updated the Echo Studio with a built-in camera. Both devices are worth your attention as they aim to make Alexa more useful around the home, whether you want to manage connected gadgets, monitor your living room, or keep your daily schedule organized. The new Echo Studio and Echo Show lean on the latest Alexa with natural conversations and the ability to handle complex, multistep requests.
Andy Jassy says Amazon “could invest a lot more” in AI infrastructure “and it wouldn’t be a bad use of capital.” (GeekWire File Photo / Todd Bishop)
Amazon reports third-quarter earnings Thursday afternoon with more demand for its cloud services than it can serve, driven by AI labs such as Anthropic and OpenAI along with growth in its traditional cloud business.
One big question for Wall Street going into the report is what Amazon might signal about next year’s spending as it tries to keep up with that demand.
CEO Andy Jassy said on an Andreessen Horowitz podcast last week that AWS capacity is largely booked for this year and next, along with “a good chunk of ’28.”
Amazon has said it expects to spend about $220 billion on capital expenditures this year, largely on AI and cloud infrastructure, up from its earlier plan of $200 billion. Even at that level, Jassy said, Amazon is “leaving a meaningful amount of demand on the table.”
Past spending pushed Amazon’s free cash flow to negative $7.6 billion for the 12 months ending in June, as the cost to add data centers, chips and other equipment exceeded the cash its operations brought in. Jassy gave no indication of slowing down, saying the company “could invest a lot more and it wouldn’t be a bad use of capital.”
Core numbers: Analysts expect revenue of about $202 billion, up 12% from a year ago, according to Yahoo Finance. That’s at the top of Amazon’s own forecast of $197 billion to $202 billion.
Analysts expect earnings of $1.96 per share, about the same as a year ago.
Amazon’s sales growth will likely look slower this time, about 12%, down from 20% last quarter. A big reason is timing. Prime Day, the company’s biggest sales event of the year, fell in the second quarter this year, rather than the third quarter as it did last year, so this quarter is up against a tougher comparison.
Amazon estimated in July that the shift would take nearly 4 percentage points off its growth rate this quarter. It hits online store sales hardest: analysts expect them to grow only about 3%, according to Zacks.
AWS: Amazon Web Services, the company’s cloud business, generates the majority of its operating profit. AWS revenue grew 37% to $42.2 billion in the second quarter, its fastest pace since 2021 and the fifth straight quarter of faster growth.
Analysts expect AWS revenue of about $45.4 billion this time, up 37.5%, according to Zacks. Wedbush is more optimistic, projecting growth of about 41%.
AWS had $496 billion in signed contracts it hadn’t yet delivered as of June, more than double the year before. That means its growth depends largely on how quickly Amazon can bring new data centers online.
“Capacity, not demand, is the constraint,” Yorkville Ives analyst Dan Ives wrote of the industry in a note Sunday.
Jassy said on the a16z podcast that running AI models is still “an order of magnitude too expensive” for businesses to use them widely, and that Amazon’s custom chips, including its Trainium AI processors, are a big piece of bringing that cost down. Amazon said in July that its chip business was on pace for more than $25 billion in annual revenue.
Anthropic stake: Amazon’s reported earnings could look very different. That’s because its profit fluctuates significantly depending on the value of its stake in Anthropic.
Last quarter, $53.4 billion in pre-tax gains, mostly on Anthropic, pushed Amazon’s earnings to $5.75 per share, against expectations of $1.82.
Anthropic filed paperwork Monday for a planned IPO on the Nasdaq. Amazon’s stake in the AI company was valued at about $190 billion as of June 30, according to Amazon’s latest quarterly filing. That includes about $92 billion in gains on convertible notes, a form of loan that turns into stock, which haven’t yet been counted in Amazon’s profit. Those notes would convert to Anthropic stock when it goes public.
Anthropic is also one of Amazon’s biggest cloud customers. Its IPO filing shows commitments to spend at least $110 billion on Amazon’s computing capacity into the 2030s, behind the $114.5 billion it committed to Google, as GeekWire reported Tuesday. Anthropic also said in the filing that it has asked its cloud providers for more computing power than they were willing to supply.
Shopping agents: Amazon blocked Meta’s new Muse AI agent from its store last month, escalating a fight over who controls the customer relationship when software does the buying. Amazon said Muse broke its rule requiring agents to identify themselves.
Agents that shop on a customer’s behalf could bypass Amazon’s advertising business, which depends on people browsing its pages. Ad revenue grew 26% to $19.8 billion last quarter, and analysts expect about $20.8 billion this time, up 18%, according to Zacks.
“Investor questions remain on agentic commerce risk, particularly to advertising, but we see limited risk,” Wedbush analyst Ygal Arounian wrote in an Oct. 16 note, citing Amazon’s logistics advantage and its role connecting shoppers with sellers.
Amazon is trying to give shoppers fewer reasons to look elsewhere. It now lists 250 million products sold on other retailers’ sites, about 2.5 times as many as in March, The Information reported Wednesday. On the seller side, Amazon opened its tools to outside AI agents in September, starting with Anthropic’s Claude.
Cloud rivals: Microsoft and Alphabet report quarterly results Wednesday afternoon, a day before Amazon. Microsoft’s report is its first under a new structure that breaks out Azure cloud revenue every quarter.
Check back with GeekWire on Thursday afternoon for coverage.
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