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Amazon includes AWS. They’re not “separate companies.”

by JCM9 1y ago

motorest 1y ago
> Amazon includes AWS. They’re not “separate companies.” Actually, they are. Perhaps what is causing your confusion is that other parts of Amazon, such as Ring or Rivian, are also separate companies, whereas parts such as Alexa and Amazon Music aren't.
- JCM9 1y ago
  By your definition then every little part of “Amazon” is technically a separate “company” including every geo. For the purposes of the discussion at hand they’re all the same. Amazon PXT and finance is the same team as AWS PXT and finance.
  - motorest 1y ago
    > By your definition then every little part of “Amazon” is technically a separate “company” including every geo. No. My definition is Amazon's actual organization chart as a holding. AWS is an independent first-level branch of direct reports of Andy Jassy, who was AWS's CEO before replacing Bezos. A similar branch is Worldwide Consumer, which groups what you think Amazon actually is, which means the online store, prime, books, devices, etc.
asteroidburger 1y ago
Amazon Web Services, Inc. is a subsidiary of Amazon.com, Inc.
tonyedgecombe 1y ago
> They’re not “separate companies.” They should be completely separate. If they were two independent companies, a low margin distribution and logistics company on one side and a high margin software services company on the other then nobody would suggest merging the two together.
- whatever1 1y ago
  How is AWS getting billions of cash and low interest rate loans for capex? That’s right. The trillion dollar low margin dinosaur pays cash by writing close to zero profit in the books, and signs the bonds.
  - motorest 1y ago
    > How is AWS getting billions of cash and low interest rate loans for capex? AWS is the cash cow. It owns between a third and half of the world's cloud computing market. Do you think it's hard for AWS to get financing?
    - whatever1 1y ago
      Yes. This year only they announced they will exceed 100B in AWS investment. This is almost as high as their 2024 revenue (not profit). Which cloud company can casually find 100B cash in a year?
      - motorest 1y ago
        > Which cloud company can casually find 100B cash in a year? AWS. Because AWS reports close to $11B/quarter, which is over half Amazon's entire revenue, and AWS owns the cloud computing market, on which the whole world runs.
        whatever1 1y ago
        AMZN revenue was over $150B/quarter in 2024. AWS was around 25B. So closer 20% of AMZN revenue. Probably you mean operating income. The key number for operating a company is the free cash flow. AWS does not have the cash flow to maintain its CAPEX. It currently uses part of Retail FCF and additional debt that the entire AMZN company takes. NVIDIA does not offer you 10 year payment plan (like depreciation schedules assume). They ask for their cash upfront. If it was that easy to find cash OpenAI would not have given up so much equity to dinosaurs with strong balance sheet.

Amazon includes AWS. They’re not “separate companies.”

by JCM9 1y ago

Amazon includes AWS. They’re not “separate companies.”

> Amazon includes AWS. They’re not “separate companies.” Actually, they are. Perhaps what is causing your confusion is that other parts of Amazon, such as Ring or Rivian, are also separate companies, whereas parts such as Alexa and Amazon Music aren't.

JCM9 1y ago
By your definition then every little part of “Amazon” is technically a separate “company” including every geo. For the purposes of the discussion at hand they’re all the same. Amazon PXT and finance is the same team as AWS PXT and finance.
- motorest 1y ago
  > By your definition then every little part of “Amazon” is technically a separate “company” including every geo. No. My definition is Amazon's actual organization chart as a holding. AWS is an independent first-level branch of direct reports of Andy Jassy, who was AWS's CEO before replacing Bezos. A similar branch is Worldwide Consumer, which groups what you think Amazon actually is, which means the online store, prime, books, devices, etc.

asteroidburger 1y ago

Amazon Web Services, Inc. is a subsidiary of Amazon.com, Inc.

tonyedgecombe 1y ago

> They’re not “separate companies.” They should be completely separate. If they were two independent companies, a low margin distribution and logistics company on one side and a high margin software services company on the other then nobody would suggest merging the two together.

whatever1 1y ago
How is AWS getting billions of cash and low interest rate loans for capex? That’s right. The trillion dollar low margin dinosaur pays cash by writing close to zero profit in the books, and signs the bonds.
- motorest 1y ago
  > How is AWS getting billions of cash and low interest rate loans for capex? AWS is the cash cow. It owns between a third and half of the world's cloud computing market. Do you think it's hard for AWS to get financing?
  - whatever1 1y ago
    Yes. This year only they announced they will exceed 100B in AWS investment. This is almost as high as their 2024 revenue (not profit). Which cloud company can casually find 100B cash in a year?
    - motorest 1y ago
      > Which cloud company can casually find 100B cash in a year? AWS. Because AWS reports close to $11B/quarter, which is over half Amazon's entire revenue, and AWS owns the cloud computing market, on which the whole world runs.
      - whatever1 1y ago
        AMZN revenue was over $150B/quarter in 2024. AWS was around 25B. So closer 20% of AMZN revenue. Probably you mean operating income. The key number for operating a company is the free cash flow. AWS does not have the cash flow to maintain its CAPEX. It currently uses part of Retail FCF and additional debt that the entire AMZN company takes. NVIDIA does not offer you 10 year payment plan (like depreciation schedules assume). They ask for their cash upfront. If it was that easy to find cash OpenAI would not have given up so much equity to dinosaurs with strong balance sheet.