Amazon CEO Andy Jassy speaks during an unveiling event in New York on Feb. 26, 2025.
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Amazon’s cloud business grew at a slower pace than expected in the first quarter, a third straight revenue miss.
Revenue at Amazon Web Services increased 17% to $29.27 billion, while analysts polled by StreetAccount had expected $29.42 billion. The growth slowed from 18.9% in the fourth quarter.
AWS, which accounted for about 19% of its parent company’s total revenue, is the world’s top provider of cloud infrastructure. Microsoft, its top competitor, announced first-quarter Azure cloud growth and guidance for the business that exceeded consensus on Wednesday. Google, the No. 3 supplier, came in a touch below consensus on cloud revenue last week.
Cloud computing is still showing healthy growth despite signals elsewhere of a more challenging economy. Automakers and retailers have begun preparing for higher costs or lower demand because of sweeping tariffs on goods imported to the U.S. that President Donald Trump announced in early April.
Amazon said first-quarter AWS operating income totaled $11.55 billion, higher than the $10.52 billion StreetAccount consensus. The segment’s operating margin of 39.5% was the widest it has been at least since 2014.
Capital infrastructures for the quarter came out to $24.3 billion, up around 74% year over year. In February, management called for roughly $105 billion in 2025 capital spending, some of which will go toward data centers containing chips that can train and run artificial intelligence models from Anthropic and other cloud clients.
Amazon CEO and former AWS chief Andy Jassy said in an April letter to shareholders that the cost of AI for customers will come down over time, due in part to Amazon’s custom chips that represent an alternative to Nvidia graphics processing units.
The AWS AI business has billions in annualized revenue, Jassy said on a conference call with analysts.
” I think we could be helping more customers and driving more revenue for the business if we had more capacity,” he said. “We have a lot more Trainium2 instances and the next generation of Nvidia instances landing in the coming months.” Trainium2, announced in 2023, is Amazon’s next-generation chip for training AI models.
AWS has diversified away from China for components in the past six years, Jassy said.
In this photo illustration a Huawei logo is displayed on a smartphone with a Chinese flag in the background.
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Beijing has banned semiconductor research firm TechInsights from working with or receiving data from Chinese entities, in a move that could add to the opaqueness of the country’s chip industry.
China’s Commerce Ministry, citing national security concerns, announced Thursday that TechInsights was designated an “unreliable entity,” which prohibits Chinese individuals or organizations from sharing information with the Canadian-based company.
TechInsights is well known in the global tech space for its in-depth coverage of Chinese-made chips and was among the first to report breakthroughs by companies like Huawei Technologies.
Beijing’s crackdown on TechInsights came less than a week after the firm revealed that a breakdown of Huawei’s latest artificial intelligence chips found components sourced from outside mainland China.
TechInsights didn’t respond to a request for comment from CNBC outside normal office hours, while Huawei didn’t immediately respond to an inquiry about TechInsights’ report.
The findings by TechInsights about Huawei’s latest “Ascend” AI chips were consistent with those from other research firms like SemiAnalysis, which said that the Chinese company relies on technology from memory chipmakers like Samsung Electronics and contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC).
These companies are under U.S. export controls, restricting them from selling their most advanced technologies to Chinese customers. Moreover, Huawei has been on a U.S. trade blacklist since 2019, barring chip makers that do business with the U.S. from working directly with it.
In response, Beijing and its chipmakers have stepped up efforts to build a self-sufficient semiconductor supply chain.
Huawei, one of China’s leading players in these efforts, has been developing alternatives to U.S. chip giant, Nvidia, though TechInsights’ latest findings may be seen by some as a knock on such efforts.
Despite its prominence in China’s chip space, few details are disclosed about Huawei’s chipmaking efforts outside of what third-party research firms uncover.
For example, reports have said that Huawei works closely with China’s leading chip foundry SMIC — a competitor of TSMC — though both companies have been silent about any collaboration since Huawei was placed on the U.S. trade blacklist.
Last year, TechInsights reportedly found that a Huawei product contained a chip component from TSMC, triggering questions about the effectiveness of U.S. export controls. The research firm’s latest findings on Huawei’s AI chip could further fuel such concerns.
Analysts say Chinese chip companies have exploited loopholes in U.S. restrictions and drawn on stockpiles of imported chips and components before certain restrictions kicked in.
Demonstrators hold a banner reading “Liberated Zone” during a protest at the Microsoft campus in Redmond, Washington, on Aug. 19, 2025. Microsoft Corp. employees rallied at the company’s Redmond, Washington, headquarters in an effort to ratchet up pressure on the software maker to stop doing business with Israel over its war in Gaza.
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A Microsoft engineer is resigning after 13 years at the software giant, claiming the company continues to sell cloud services to the Israeli military and that executives won’t discuss the war in Gaza.
Scott Sutfin-Glowski, a principal software engineer, informed colleagues at Microsoft on Thursday that this will be his last week at the company.
“I can no longer accept enabling what may be the worst atrocities of our time,” he wrote.
In the letter, he referred to a February Associated Press article that said the Israeli military had at least 635 Microsoft subscriptions, and he claimed the vast majority of them remain active.
Microsoft declined to comment.
Sutfin-Glowski’s announced departure comes a day after President Donald Trump said Israel and Hamas committed to the first phase of a peace plan two years into the latest conflict. The AP reported on Thursday, citing government officials, that the U.S. is sending roughly 200 troops to Israel to help support the ceasefire deal.
The conflict has been a matter of ongoing tension at Microsoft.
For months, employees have protested the company’s cloud business from the Israeli military. Five employees were fired.
In September, Microsoft said it had stopped providing certain services to a division of the Israeli Ministry of Defense, though it didn’t provide specifics. That decision came after Microsoft investigated an August report from The Guardian saying the Israeli Defense Forces’ Unit 8200 had built a system for tracking Palestinians’ phone calls.
Sutfin-Glowski said the company cut off communication systems that allowed employees to bring up their concerns regarding the Israeli military’s use of Microsoft products.
Outside a building at Microsoft headquarters in Redmond, Washington, on Thursday, employees and community members opened up banners calling on the company to drop ties with Israel, according to a statement from No Azure for Apartheid. The group has been asking Microsoft to listen to the more than 1,500 employees who petitioned the company to endorse a ceasefire.
“Today, the ceasefire in Gaza finally takes effect after two years of genocide, but the atrocities, human rights abuses, war crimes, apartheid, and occupation continue,” Sutfin-Glowski wrote.
Tesla is facing a federal investigation into possible safety defects with FSD, its partially automated driving system that is also known as Full Self-Driving (Supervised).
Media, vehicle owner and other incident reports to the National Highway Traffic Safety Administration showed that in 44 separate incidents, Tesla drivers using FSD said the system caused them to run a red light, steer into oncoming traffic or commit other traffic safety violations leading to collisions, including some that injured people.
In a notice posted to the agency’s website on Thursday, NHTSA said the investigation concerns “all Tesla vehicles that have been equipped with FSD (Supervised) or FSD (Beta),” which is an estimated 2,882,566 of the company’s electric cars.
Tesla cars, even with FSD engaged, require a human driver ready to brake or steer at any time.
The NHTSA Office of Defects Investigation opened a Preliminary Evaluation to “assess whether there was prior warning or adequate time for the driver to respond to the unexpected behavior” by Tesla’s FSD, or “to safely supervise the automated driving task,” among other things.
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The ODI’s review will also assess “warnings to the driver about the system’s impending behavior; the time given to drivers to respond; the capability of FSD to detect, display to the driver, and respond appropriately to traffic signals; and the capability of FSD to detect and respond to lane markings and wrong-way signage.”
Tesla did not respond to a request for comment on the new federal probe. The company released an updated version of FSD this week, version 14.1, to customers.
For years, Tesla CEO Elon Musk has promised investors that Tesla would someday be able to turn their existing electric vehicles into robotaxis, capable of generating income for owners while they sleep or go on vacation, with a simple software update.
That hasn’t happened yet, and Tesla has since informed owners that future upgrades will require new hardware as well as software releases.
Tesla is testing a Robotaxi-brand ride-hailing service in Texas and elsewhere, but it includes human safety drivers or valets on board who either conduct the drives or manually intervene as needed.
In February this year, Musk and President Donald Trump slashed NHTSA staff as part of a broader effort to reduce the federal workforce, impacting the agency’s ability to investigate vehicle safety and regulate autonomous vehicles, The Washington Post first reported.