Amazon ended the third quarter with free cash flow of minus $42.4 billion, which is roughly what happens when a company builds the future faster than it collects on the present. A quarter earlier the figure was minus $7.5 billion. A year earlier it was a comfortable plus $14.8 billion. Amazon now expects total spending for the year to reach $220 billion.
The numbers behind the minus sign
The company's own explanation is simple. It is buying a great deal of property and equipment, and most of that is tied to AI. According to the filing, such purchases rose by $94.8 billion. The money goes into the infrastructure that runs Amazon's cloud services and its AI systems.
Here is how the quarterly free cash flow figures line up:
| Period | Amazon free cash flow |
|---|---|
| Third quarter, a year earlier | plus $14.8 billion |
| Previous quarter | minus $7.5 billion |
| Third quarter, this year | minus $42.4 billion |
The report does not break the $220 billion into categories. Treat it as a headline total for the year, not a budget line you can audit.
Revenue grew, just not by enough
Revenue for the quarter reached $201.9 billion, up 12% from the year before. That would be a respectable result for most companies, but it came in below what analysts expected. Advertising and retail also missed forecasts.
Chief financial officer Brian Olsavsky pointed to the calendar. The big Prime Day sales landed mostly in the second quarter this year, while last year they fell in the third. He offered this as an explanation for part of the slower annual growth, not all of it.
A shifted sales event is the friendliest excuse a finance chief can reach for. It is also a fair one, as far as it goes.
Four giants, one still in the black
Amazon was the last of the four biggest tech companies pouring money into AI infrastructure to report this cycle. Only Microsoft kept a positive free cash flow. The others:
- Meta: minus $2.12 billion.
- Alphabet, Google's parent: minus $9.07 billion.
- Amazon: minus $42.4 billion.
Amazon's hole is by far the deepest of the three that went negative.
Investors noticed. Alphabet's shares fell 12% on Thursday after its report. Amazon's were down about 7% that evening.
Jassy's defence: chips and a platform
CEO Andy Jassy answered by pointing to what Amazon has built itself. One piece is Trainium, a line of specialised compute accelerators meant to compete with Nvidia's. The other is Bedrock, a platform for working with AI models.
His argument is that these let Amazon capture its share of the growth in the AI market, rather than just paying for the privilege of being near it. Whether the share is large enough to cover the bill is the open question, and the quarter's numbers don't settle it.
The shopping assistant, in numbers
Jassy also talked up Alexa for Shopping. By his account, customer interactions with it grew 570% over the year. US users of the tool spend on average 50% more per order than shoppers who don't use it.
The second figure is a comparison between two groups of people. It does not by itself say whether the tool makes people spend more or whether bigger spenders are simply the ones who try it. The report gives no further detail.
He was more restrained about shopping through general-purpose AI agents. Jassy said it has not become common practice. In his estimate the experience is not yet more convenient than going straight to the retailer.
It is a notable position for the head of one of the world's biggest retailers. Amazon is investing heavily in AI while saying that, for now, shoppers do fine without somebody else's agent standing in the middle.
What has to happen next
Amazon is raising spending on infrastructure while its free cash flow deteriorates and revenue falls short of forecasts. To justify the outlay, the compute capacity, the in-house chips and the AI services all have to produce enough return. Nobody has shown that yet.
Until then, shareholders hold a $42.4 billion hole and a promise. The share price that evening suggests they are valuing the promise at a discount.