Amazon's $42.4 Billion Cash Burn Caps a Rough Week for AI Hyperscalers

Amazon reported a negative free cash flow of $42.4 billion in its third-quarter earnings, a sharp decline from the $7.5 billion burn in the prior quarter and a $14.8 billion inflow a year earlier, marking the latest AI hyperscaler disappointment. The cash drop was driven by a $94.8 billion jump in property and equipment purchases tied to AI investments, with revenue of $201.9 billion falling below analyst estimates. Advertising and retail segments also underperformed, though CFO Brian Olsavsky cited shifted Prime Day dates as a factor. Amazon was the last hyperscaler to report, with only Microsoft showing positive free cash flow. CEO Jassy defended the AI strategy, citing Trainium chips and Alexa for Shopping, which saw interactions up 570% year over year.