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Issue 89: Amazon's Cash Flow Turns Negative as AI Spending Reaches $77 Billion

Permanent copy of issue 89. Today's issue is always the front page.

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Amazon spent $77.3 billion on capital projects in the third quarter and reported on Thursday that its free cash flow over the past twelve months had turned to an outflow of $42.4 billion, even as Amazon Web Services grew 39 percent. Intel said its data-centre revenue rose 78 percent while its PC chip sales fell 5 percent, and its shares dropped more than 20 percent after hours as it warned that the PC slowdown will last at least through the first half of 2027. Mistral published the open weights of Mistral Large 4, a one-trillion-parameter model, and FirstEnergy said the data-centre load seeking power on its system has grown to 26 gigawatts.

Date: 2026-10-30
Updated: 2026-10-30 06:30
Status: LIVE

Broadcast

Amazon earned $168 billion in operating cash over the past year and spent all of it and $42 billion more on property and equipment, most of it for AI. Alphabet showed the same strain on Wednesday; Microsoft alone still pays its own way. The suppliers of the parts are prospering, and Intel's quarter shows who pays for that: its server chips sold as fast as it could make them, while its PC business shrank as rising memory costs pushed up the price of ordinary computers. Mistral's decision to publish the weights of a trillion-parameter model is a real gift to anyone who wants to run frontier AI on hardware they own, but owning that hardware is precisely what the memory shortage is making harder.

Watch

• Apple's fiscal fourth-quarter results on Monday, November 2, and what it says about memory costs and Mac and iPhone supply
• Whether federal regulators accept California's curtailment-first rules for data centres
• How quickly quantised versions of Mistral Large 4 appear that fit on a single workstation
• Whether Intel's warning on PC demand is echoed by other PC makers

Stories

Amazon's free cash flow turns negative as quarterly AI spending reaches $77bn

Amazon said on Thursday that its capital expenditure reached $77.3 billion in the third quarter, more than double a year earlier, leaving free cash flow over the past twelve months at an outflow of $42.4 billion. It held its 2026 capital spending forecast at about $220 billion and said it expects to spend meaningfully more in 2027.
-- Amazon follows Alphabet in showing that building AI data centres now costs more cash than even a giant business brings in, which concentrates computing in a few firms able to borrow at that scale.
2026-10-29 / CNBC / chip / central / #amazon-s-free-cash-flow-turns-negative-as-quarte

AWS revenue grows 39 percent, its fastest pace in nearly five years

Amazon Web Services sales rose 39 percent to $46.0 billion in the third quarter, its fastest growth in nearly five years, and its operating income reached $17.8 billion. Chief executive Andy Jassy said the company projects AWS revenue growth of more than 40 percent in both 2027 and 2028.
-- Growth at that pace means companies are still choosing to rent AI computing from Amazon's data centres rather than buy machines of their own, which is the return Amazon is counting on to justify its spending.
2026-10-29 / Amazon / chip / central / #aws-revenue-grows-39-percent-its-fastest-pace-in

Intel's data-centre sales rise 78 percent while its PC chip sales fall

Intel said its Data Center and AI revenue rose 78 percent to $7.3 billion in the third quarter while its client computing revenue fell 5 percent to $8.1 billion. Its shares fell more than 20 percent in extended trading after it forecast fourth-quarter revenue of $15 billion to $16 billion and said the PC slowdown would last at least through the first half of 2027.
-- Memory that once went into personal computers is being bid away by data centres, so the machines people would use to run AI locally are getting dearer and scarcer while server chips sell out.
2026-10-29 / Intel / chip / central / #intel-s-data-centre-sales-rise-78-percent-while-

Mistral releases open weights for its trillion-parameter Large 4 model

Mistral published the weights of Mistral Large 4 on Hugging Face on Thursday, a multimodal model with about one trillion parameters, 49 billion active per token and a one-million-token context window. It ships in FP8 and NVFP4 versions, with GGUF files from Unsloth and the llama.cpp team, under a licence that limits offering it as a hosted service.
-- A frontier-class model that anyone may download and run on their own hardware weakens the hold of the closed labs, though at this size it still needs server-class memory rather than a desk machine.
2026-10-29 / Hugging Face / efficiency / mixed / #mistral-releases-open-weights-for-its-trillion-p

FirstEnergy says data-centre demand on its network has grown to 26 gigawatts

FirstEnergy said on Wednesday that its long-term pipeline of data-centre load grew 4.8 percent in the third quarter to 26 gigawatts across states including Maryland, Ohio, Pennsylvania and West Virginia. Two of its utilities are seeking approval for a $2.7 billion project built around a 1.2-gigawatt gas plant and have asked for bids on 3 gigawatts of additional turbines.
-- Utilities are now planning power plants around data-centre demand, and the company said it expects transmission spending to rise by at least $4.75 billion, costs that are usually recovered from all customers.
2026-10-29 / Utility Dive / energy / central / #firstenergy-says-data-centre-demand-on-its-netwo

Axis
local [#########################-----] central
Score: 84   clusters still winning   +1
Amazon now spends more on data centres than it earns in cash, Intel's server business is booming while the PC it built its name on shrinks, and utilities are planning gigawatts of new plant for data-centre load, so the money and the electricity are still moving toward the largest clusters. Mistral's open trillion-parameter model keeps the local side in the contest, but it is far too large for a desk machine; the score moves up one point to 84.

Forces

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Latest: BTC $77,372 / hashrate ~1049.72 EH/s / token markers avg $5.2583/M / axis 84. These lines are different units. We compare timing, not dollars-to-hashrate.

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Power and list prices
BTC $77,372 / hashrate ~1050 EH/s. List-price gap (not a subsidy %): 123.1x list gap (blended) Mercury 3 -> Claude Fable 5.1 ($0.16/M to $20.00/M). (mempool.space + Coinbase/CoinGecko)

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