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$META CFO: "Third quarter GAAP operating income was $13 billion, representing a 37% decline year-over-year and a 20% operating margin. Excluding the Q3 legal charges related to the aforementioned legal settlement, our third quarter operating income would have increased 11% year-over-year."
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Five years into his run as CEO, Andy Jassy has nearly tripled the size of AWS, grown Amazon's revenue by about 80%, and expects to spend $220 billion this year to win AI. Amazon's AI business hit a $25 billion run rate in three years, growing several hundred times faster than early AWS.
Jassy joins a16z's Ben Horowitz and Erik Torenberg to discuss the decisions behind that run, from rebuilding Amazon's fulfillment network after the pandemic to the AWS origin story.
They also cover why data centers became a political fight, Amazon's custom chips, its stakes in Anthropic and OpenAI, why inference needs to get 10x cheaper, AI's most underrated risk, and why every company will have to reinvent its products from scratch, plus Jassy's advice for anyone who's 18 today.
0:47 How Amazon has changed since 2021
1:51 How the pandemic reshaped retail
3:30 Why AI supercharged AWS's growth
5:20 When leadership principles clash
9:36 $60M vs. $25B: early AWS vs. early AI
13:20 How the AI CapEx cash cycle works
15:44 Why the US must build data centers
20:55 The labs-to-enterprise AI barbell
23:12 Demand vs. longtime AWS customers
28:11 Annapurna, Graviton, and Trainium
33:55 Backing Anthropic and OpenAI
37:15 Why AI means smaller teams
42:13 AI's underrated risk: security
46:29 Why Amazon rewired Alexa's brain
53:07 What Jassy tells his kids about AI
56:36 Betting on AI, robotics, and space
YouTube: youtu.be/-YMMRQ1qscI
@ajassy @Amazon @bhorowitz @eriktorenberg
$AMZN CEO Andy Jassy says AWS capacity is largely sold out through 2027, with a significant portion of 2028 already committed,
"There's only so much data center and power today. There's only so much memory, and I don't think that shortage ends in 2027. I think that, you know, one of the reasons, coming back to the capital investment, why I think we could invest a lot more and it wouldn't be a bad use of capital is that, you know, 2026 is obviously at this point sold out. 2027 is largely sold out. We always leave a certain amount for on-demand and our inference service, Bedrock or EC2, but largely sold out, all the big chunks. A good chunk of 2028 is sold out. Like, there's so much demand."
$META CFO: New AI investments carry longer payback periods than core advertising initiatives
"Our AI investments are already delivering substantial incremental advertising revenue through stronger engagement, better recommendations and more efficient monetization. Building on this progress, our MSL investments are creating the technology and infrastructure needed to unlock significant new revenue opportunities and strengthen capabilities across the business. While these investments will take longer to generate returns than those in our core business, the breadth of monetization opportunities and internal efficiencies gives us confidence in their long-term potential."
The Transcript retweeted
The Week of October 26th Earnings 📈📊
Alphabet, Microsoft, Amazon & Intel among those reporting next week:
💻 Tech: $GOOGL $MSFT $AMZN $INTC $NOW
🏭 Industrials: $BA $CAT $UPS $GEV $WM
🛒 Consumer: $KO $SBUX $MDLZ $CL
🏦 Financials: $V $MA $UBS $HSBC
⚡ Energy: $XOM $CVX $SHEL $TTE
💊 Healthcare: $LLY $MRK $ABBV $AZN
📡 Telcos: $VZ $TMUS
More at TheTranscript.Substack.com
$AMZN reports Q3 26 earnings next week on Thursday
Five years into his run as CEO, Andy Jassy has nearly tripled the size of AWS, grown Amazon's revenue by about 80%, and expects to spend $220 billion this year to win AI. Amazon's AI business hit a $25 billion run rate in three years, growing several hundred times faster than early AWS.
Jassy joins a16z's Ben Horowitz and Erik Torenberg to discuss the decisions behind that run, from rebuilding Amazon's fulfillment network after the pandemic to the AWS origin story.
They also cover why data centers became a political fight, Amazon's custom chips, its stakes in Anthropic and OpenAI, why inference needs to get 10x cheaper, AI's most underrated risk, and why every company will have to reinvent its products from scratch, plus Jassy's advice for anyone who's 18 today.
0:47 How Amazon has changed since 2021
1:51 How the pandemic reshaped retail
3:30 Why AI supercharged AWS's growth
5:20 When leadership principles clash
9:36 $60M vs. $25B: early AWS vs. early AI
13:20 How the AI CapEx cash cycle works
15:44 Why the US must build data centers
20:55 The labs-to-enterprise AI barbell
23:12 Demand vs. longtime AWS customers
28:11 Annapurna, Graviton, and Trainium
33:55 Backing Anthropic and OpenAI
37:15 Why AI means smaller teams
42:13 AI's underrated risk: security
46:29 Why Amazon rewired Alexa's brain
53:07 What Jassy tells his kids about AI
56:36 Betting on AI, robotics, and space
YouTube: youtu.be/-YMMRQ1qscI
@ajassy @Amazon @bhorowitz @eriktorenberg
$SPCX CEO: Compute capacity is projected to exceed 13GW by year-end 2027, including at least 10GW of incremental capacity next year.
"At this point, I would say -- I would say I'm fairly confident of being able to bring an incremental 10 gigawatts of compute online in 2027. That would be in addition to the roughly 3 gigawatts, maybe 2.5 to 3 gigawatts that we'll have online by the end of this year. So I put it this way. I would be surprised if we brought on less than 13 gigawatts of compute by the end of next year."
Enjoyed this?
Subscribe to our weekly newsletter here to get key quotes from earnings calls on Email:
thetranscript.substack.com/s…
Alphabet, Microsoft, Amazon & Intel among those reporting next week:
💻 Tech: $GOOGL $MSFT $AMZN $INTC $NOW
🏭 Industrials: $BA $CAT $UPS $GEV $WM
🛒 Consumer: $KO $SBUX $MDLZ $CL
🏦 Financials: $V $MA $UBS $HSBC
⚡ Energy: $XOM $CVX $SHEL $TTE
💊 Healthcare: $LLY $MRK $ABBV $AZN
📡 Telcos: $VZ $TMUS
More at TheTranscript.Substack.com
$META VP: ""Nearly 30% of product managers, designers and data scientists and researchers shipped code in the most recent measured period, that compares with about 5% a year ago. Obviously, their total contribution remains smaller than engineering output, but I think it's an encouraging sign that AI can reduce some functional barriers and shorten the path from ideas to working product.""
The Transcript retweeted
$META's FCF turned negative in Q3 2026:
"Capital expenditures, including principal payments on finance leases, were $34.9 billion, driven by investments in servers, data centers and network infrastructure. Free cash flow was negative $2.1 billion." - CFO
The Transcript retweeted
"Challenging environment for raising capital" = Funding sources are becoming saturated = Higher rates are needed to clear the market
$META's Special Committee: "...timing is important to secure capital before competitors saturate various funding options. Recent significant capital raises at other notable companies....have resulted in an increasingly challenging environment for raising capital"
The Transcript retweeted
Honoured to be featured in the @WSJ Innovators Issue. I’ve always believed in the power of human ingenuity to solve our hardest problems. I’m confident we can collectively navigate the potential challenges of frontier models and usher in a new golden age of scientific discovery!
From childhood prodigy to AI pioneer to Nobel Prize winner, Demis Hassabis has always had a simple plan. Step one, solve intelligence. Step two, solve everything else. 🔗 on.wsj.com/4i0Axoo
$META's FCF turned negative in Q3 2026:
"Capital expenditures, including principal payments on finance leases, were $34.9 billion, driven by investments in servers, data centers and network infrastructure. Free cash flow was negative $2.1 billion." - CFO
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Subscribe to our weekly newsletter here to get key quotes from earnings calls on Email:
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$META CFO: "We ended Q3 with over 66,000 employees, down 12% from Q2 following the May 2026 head count reduction."
$META: "The Special Committee considered whether the Company could issue Class A common stock in order to raise capital, but Mr. Zuckerberg made it clear during the course of the negotiations with the Special Committee that he would not support a significant equity financing that would have the effect of reducing his voting power in the Company."
$META's Special Committee: "...timing is important to secure capital before competitors saturate various funding options. Recent significant capital raises at other notable companies....have resulted in an increasingly challenging environment for raising capital"
$META's Special Committee: "...timing is important to secure capital before competitors saturate various funding options. Recent significant capital raises at other notable companies....have resulted in an increasingly challenging environment for raising capital"
$META CFO: "Muse right now skews to our highest value users. I think over 20% of U.S. Muse users today are $1,000-plus annual ARPU users. So, it gives you a sense of kind of what the early adopters look like, and so they are not totally representative of the overall U.S. user base, which is not representative of the overall worldwide user base."