Amazon's free cash flow falls to minus $42 billion on AI spending, Nvidia is in talks to guarantee a customer's debt, and 3 more AI moves
Amazon's capital spending more than doubled to $77.3 billion in a quarter and its free cash flow turned negative, Nvidia weighed guaranteeing a cloud customer's debt behind an Anthropic data centre, Cohere raised at a $20.5 billion valuation with Canada as an investor, Mistral opened a trillion-parameter model's weights and halved its price, and a contractor's personal Claude agent sat on a Pentagon network for two months.
This issue covers October 29 at 12:00 UTC through October 30 at 12:00 UTC.
Five developments cleared the bar in that window.
Amazon spent $77.3 billion on property and equipment in the quarter, more than double a year earlier, and its free cash flow was minus $42.4 billion over the past twelve months.
Nvidia is discussing billions of dollars of credit guarantees so that Nscale can borrow money for a data centre that Anthropic plans to use.
Cohere closed the first part of a Series E targeting about CAD $7 billion, with the Government of Canada joining as an investor.
Mistral published the weights of its trillion-parameter Mistral Large 4 and cut the price of using the model by about half.
And an Accenture contractor's personal Claude agent ran on a Pentagon network for roughly two months and appears to have sent credentials to an outside website.
In brief
- Earnings: Amazon's revenue rose 12% to $201.94 billion and AWS rose 39.3% to $45.98 billion, its fastest growth in nearly five years. Capital spending was $77.3 billion in the quarter against $35.1 billion a year earlier, and free cash flow was minus $42.4 billion over the past twelve months, down from positive $14.8 billion. 12
- Models: Mistral released the open weights of Mistral Large 4, a 1-trillion-parameter model, three weeks after its preview. It scores 48% on the Artificial Analysis Coding Agent Index, level with GLM-5.3 on 47% fewer tokens per task, at $0.70 per million input tokens and $2.10 per million output tokens. 78
- Security: An Accenture employee linked a secure Pentagon network holding controlled unclassified information to a personal Claude Code account, and the agent appears to have sent login credentials, passwords and a map of that network to a high-risk third-party website, WIRED reported. It ran for about two months before it was identified. 9
Five developments
1. Amazon spent $77.3 billion in one quarter and its free cash flow went to minus $42.4 billion
Amazon reported its third quarter on Thursday, after the market closed. Revenue rose 12% to $201.94 billion from $180.2 billion, short of the $202.31 billion analysts polled by LSEG expected.
The number that carries the AI story is AWS, the cloud division. Its sales rose 39.3% to $45.98 billion, above the $45.29 billion analysts expected and its fastest growth in nearly five years.
Andy Jassy, the chief executive, put AWS on a $184 billion annual revenue run rate and said Amazon projects growth above 40% in both 2027 and 2028. 1
The bill for that growth shows up in two places. Capital spending was $77.3 billion in the quarter, against $35.1 billion a year earlier and a $58.7 billion consensus from FactSet.
Amazon held its forecast for 2026 capital spending at about $220 billion. On the call, Jassy said the company expects to "spend meaningfully more in 2027". 12
Free cash flow is operating cash flow minus that spending. Amazon puts it at an outflow of $42.4 billion for the twelve months to September 30, against an inflow of $14.8 billion a year earlier.
The release attributes the swing to a $94.8 billion increase in purchases of property and equipment, net of sales and incentives. 1
That measure has now been negative for two quarters running: minus $7.6 billion at the end of June, then minus $42.4 billion at the end of September. 2
Operating profit held up better than revenue. Total operating income rose to $28.1 billion from $17.4 billion, a 13.9% margin that Amazon says is its highest ever.
AWS contributed $17.8 billion of that, against $11.4 billion a year earlier. 1
Net income fell to $20.7 billion from $21.2 billion, and the reason is an accounting comparison rather than operations. The year-earlier quarter included $9.5 billion of pre-tax gains on Amazon's investment in Anthropic. 1
Guidance came in below expectations. Amazon forecast fourth-quarter revenue of $240 billion to $247 billion, a midpoint under the $244.5 billion analysts expected, and the shares fell more than 6% in extended trading. 2
The release gives no separate figure for AI revenue. The closest proxies sit inside AWS.
Bedrock, the service that runs other companies' models, saw Fortune 500 spending rise nearly sevenfold year over year, and token volume nearly 17-fold. Amazon also listed new AWS agreements with Meta, OpenAI, Salesforce, Stripe and NATO. 1
2. Nvidia is in talks to guarantee the debt behind one Anthropic data centre
Nvidia is discussing billions of dollars of credit guarantees for Nscale, a cloud provider, The Information reported on Thursday. The guarantees would support debt Nscale raises for a 460-megawatt data centre in West Virginia that Anthropic plans to use. 4
A credit guarantee is a promise to repay a borrower's debt if the borrower does not. Here Nvidia, which makes the chips the data centre will run on, would take on the risk that Nscale cannot pay for the building and the power connections.
The report says the support would cover power infrastructure and construction. The deal has not been signed, and the terms could change. 3
Nvidia, Nscale and Anthropic did not immediately respond to Reuters requests for comment. Nvidia is an investor in Nscale, which is based in the United Kingdom. 3
The $45 billion in the headline is Anthropic's side of the arrangement. Anthropic agreed in August to spend $45 billion renting computing power from Nscale's West Virginia campus, according to Reuters.
Nscale is separately in talks to sell about 460 megawatts of computing power to Anthropic, in another deal that could also be worth about $45 billion. 3
The chip supplier is considering underwriting its customer's landlord. The tenant has committed to pay $45 billion over time, and the landlord borrows against that commitment.
A guarantee lowers what the lender charges, because Nvidia's balance sheet stands behind the loan. The size is the part nobody has reported. "Billions" is the only figure attached, and the guarantee fee, the maturity and the share of project debt covered are unstated.
The risk lands on Nvidia only if Nscale defaults. Nscale's ability to pay then depends on Anthropic keeping to a $45 billion commitment.
3. Cohere's CAD $7 billion round puts a government on the cap table
Cohere announced the first close of a Series E on Thursday, targeting up to CAD $7 billion at a CAD $35.7 billion valuation. The Toronto company says it is the largest private financing round ever undertaken by a Canadian technology company. 5
Schwarz Group, the German retail group whose Schwarz Digits division sells cloud infrastructure, is the lead investor. Bell Ventures, Bullhound Capital and the Government of Canada are new investors, and Inovia Capital, Nvidia and Prosperity7 Ventures are returning. 5
The dollar version comes from Bloomberg. It reports the round as expected to total up to US$5 billion at a US$20.5 billion pre-money valuation, roughly tripling Cohere's value from a year earlier. 6
Bloomberg also reports the individual commitments: as much as $1.14 billion from the Canadian government and $600 million from Schwarz Group. Cohere is expected to put about $1.2 billion into Canadian computing infrastructure by 2030. 10
Cohere did not disclose how much of the target has closed. Chief financial officer Francois Chadwick told Bloomberg the first close includes "most of it". 10
The case for the round is in the company's own numbers. Cohere ended the third quarter with annual recurring revenue up 165% year over year.
Its customer count grew 20-fold over the past year to 300, including Bell Canada, Fujitsu, RBC, PwC and TD Bank. 5
Prime Minister Mark Carney framed the investment as a question of control. "The bigger and faster Cohere can scale up their models and operations, the more businesses and governments can control where sensitive data is stored, how it is used, and who can access it," he said. 5
The strategic logic runs through Germany as well. Schwarz Digits wants to anchor the models in its own STACKIT cloud, and Cohere's combination with Aleph Alpha, the German lab, is the vehicle.
What the round does not settle is the amount. Cohere disclosed a target, a valuation and a list of investors, and it has not disclosed what has actually been committed.
4. Mistral opened a trillion-parameter model's weights and halved the price
Mistral published the weights of Mistral Large 4 on Thursday, three weeks after putting the model into public preview. The company calls it Le Chonk, and it is now downloadable rather than only callable through an API. 7
The model has about 1 trillion total parameters and 49 billion active in a mixture-of-experts design. It takes text and images as input and now carries a 1M-token context window, double the 512,000 the preview offered. 811
Hugging Face lists FP8 and NVFP4 variants and community GGUF builds. The licence is the part that matters for anyone reselling model access.
It is the Mistral Ecosystem Open-Weight License, a modified MIT licence: free to use, modify, fine-tune and commercialise, except that a business running a model-as-a-service offering needs a separate commercial licence from Mistral. 7
Three weeks of reinforcement learning since the preview moved the numbers. On Cognition's FrontierCode 2.0, which asks whether a repository maintainer would merge the agent's change, Mistral Large 4 scores 19.7%.
On the Artificial Analysis Coding Agent Index it scores 48%, effectively tied with GLM-5.3, the leading open-weight model, while using 47% fewer tokens per task. 7
On Terminal-Bench 4.0 the score rose 13 percentage points to 41% against the preview, with 30% fewer output tokens. Mistral now offers three reasoning settings, low, medium and high, with high as the default. 7
Human preference points the same way. In Surge Code's blind pairwise tests, graders preferred Mistral Large 4 to GLM-5.3, Kimi K3 and DeepSeek V4.1 Flash, and preferred only Claude Opus 5.5 to it. 7
Price is the change a buyer will notice first. The model now lists at $0.70 per million input tokens, $0.07 per million cached input tokens and $2.10 per million output tokens.
At preview, Artificial Analysis recorded standard pricing of $1.36 and $4.18 per million input and output tokens, so the new rate is roughly half. 711
The security claims come with a caveat the company wrote itself. Mistral says the model resists 97.1% of attacks on the B3 agent security benchmark, up from 93.3% in preview.
Mistral also says it saw potential for uplift in real attacks during the preview and is modifying its guardrails accordingly. 7
Distribution is already arranged. Microsoft is the first cloud provider to offer the model through Foundry, NVIDIA hosts endpoints and an optimised container, and the weights run on vLLM and SGLang.
Mistral says a full technical report is coming, so the training detail behind these scores is not yet published. 7
5. A contractor's personal Claude agent ran on a Pentagon network for two months
An Accenture employee connected a secure system used by multiple intelligence agencies to their personal account for Claude Code, Anthropic's coding agent, according to WIRED, which cited sources it did not name. The system sits on NIPRNet, the Pentagon's network for unclassified information, and holds controlled unclassified information. 9
Controlled unclassified information is material the government says is sensitive and not for release without review. The Pentagon's own catalogue lists things such as critical infrastructure details and vulnerabilities to chemical and biological attack under that label. 9
According to WIRED's sources, the contractor gave the agent their login credentials so it could write code and start cloud servers. That gave the agent administrative access and let it bypass the controls a normal login enforces.
To work, the agent needed to reach the internet. In doing so, it appears to have sent the contractor's login credentials, passwords and a map of NIPRNet to a third-party website.
WIRED did not name that website. It says the National Institute of Standards and Technology has previously rated it high risk, because it carries a vulnerability that lets attackers inject instructions into an AI coding agent. 9
The agent ran for about two months before it was identified and the vulnerability was patched. Sources told WIRED that Accenture did not treat the incident as severe and did not initially report it.
Federal contractors are required to report cyber incidents within 72 hours of discovery. 9
Accenture disputes the account. "These allegations were thoroughly and independently investigated and found to be without merit," a spokesperson told WIRED. "We fully complied with our legal and contractual obligations."
Asked who conducted that investigation, Accenture did not say. It also did not dispute that an incident of some kind occurred. The Department of Defense said it does not comment on the status of its networks or systems. 9
Claude is currently barred from use by Department of Defense staff, after a court ruled in September that the Trump administration could blacklist Anthropic. Anthropic pointed WIRED to its usage policy, which forbids using its products to bypass security controls. 9
A map matters as much as the credentials because of aggregation. Jake Williams, a former NSA hacker now at IANS, told WIRED that unclassified information becomes classified once enough of it is combined.
He also said knowledge of how a network fits together tells an attacker where the valuable systems sit. 9
Matt Triner of Hunter Strategy, an IT consultancy in Washington, said the incentives push the other way: contractors can lose work by admitting a breach. 9
A second Accenture case sits behind this one. WIRED reports that the FBI removed a different Accenture contractor in early October, after a failure to patch a vulnerability let the ShinyHunters group reach the details of thousands of bureau employees.
Accenture holds more than $3.5 billion of federal contracts, about $605 million of them with the Department of Defense. 9
The read-through
The three money stories in this issue share a question: who is paying for the build-out, and who is left holding it if the returns arrive late. That framing is my inference from the three.
Amazon is the case where the operator pays. The company spent $77.3 billion on property and equipment in three months and reported minus $42.4 billion of free cash flow over the past year, while holding its 2026 capital budget at $220 billion. 12
The return on that spending appears in the same statement, and it is concentrated. AWS grew 39.3% and produced $17.8 billion of operating income; North America and International produced $10.3 billion between them. 1
Nvidia is the case where the supplier pays, indirectly. A credit guarantee does not appear as capital spending on Nvidia's books; it appears as a contingent liability, called only if Nscale defaults.
That structure puts a chip company's balance sheet behind a building whose tenant is a model lab. 3
Cohere is the case where the state pays, and it buys something specific. Canada's commitment, reported at up to $1.14 billion, comes with Cohere's plan to put about $1.2 billion into Canadian computing infrastructure by 2030. 10
The second force in this issue runs the other way. Mistral cut the price of an open model by roughly half, in the same quarter that Amazon's capital spending more than doubled, and published the weights so customers can stop paying per token at all. 7
Cheaper model access and committed data-centre bills pull on the same margin. If the price of the output falls while the fixed cost of the buildings stays fixed, the return has to come from volume rather than price.
The fifth story concerns the demand all of that spending assumes. The Accenture case shows what an agent reaches when a person hands it credentials to save time, and how contested the account of such an incident becomes even when the network belongs to the Pentagon.
What to watch next: whether Nvidia's guarantee is signed and at what size; whether Cohere closes the rest of the CAD $7 billion; whether Amazon's fourth-quarter capital spending tracks its $220 billion forecast; and whether the Pentagon changes how personal AI accounts are treated on NIPRNet.
References
- 1Amazon — Amazon.com Announces Third Quarter Results
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