Fact Sheet: Amazon Profits, ChatGPT Search, iPhone Recovery, China Drone Sanctions, Intel Surprises

It certainly feels like Fitbit was the king of wearable technology a long time ago. The Apple Watch's disappointing launch didn't break Fitbit's power… but then it did. These days, watches are in, bracelets are out, and Google is a minor player in this category… even if its products are stylish.

As for me? That same year I swapped my fitness bracelet for a mechanical watch. One less thing to worry about when connecting. —Andrew Nusca

PS My editor would like to let you know that Josh Kushner, founder of venture firm Thrive Capital (Airtable, Anduril, OpenAI, Plaid, Stripe), will be speaking at the upcoming Fortune Global Forum November 11-12 in NYC. Request an invitation here.

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Amazon's $110 billion cloud business is turning a profit

(Michael Buckner/Variety/Getty Images)

Amazon's quarterly financial results beat analysts' expectations on Thursday, driven by strong sales growth and record operating income. But it was Amazon Web Services, the company's $110 billion cloud computing business, that really stood out.

AWS operating income increased 50% year-over-year to $10.4 billion. Meanwhile, the unit's revenue rose 19% to $27.5 billion from the same period last year, in line with expectations. The division's operating profit margin was 38%, up from 30% in the same period last year.

The robust gains came even as Amazon, like its big tech rivals, is investing heavily in its own AI consumer products while expanding its offering of AI services and building blocks for enterprise customers.

One unknown is what those gains will look like as AWS's multibillion-dollar generative AI business – where revenue is growing more than 100% year over year – becomes a larger part of the overall Amazon Web Services business. “There will be very healthy margins here over time,” says Amazon CEO Andy Jassy said during a conference call.

Meanwhile, Amazon continues to increase its capital spending, with a particular focus on expanding its data center space. Increased investments in automation and robotics also play a role. Jassy said of the company's ongoing efforts to automate warehouses: “We really believe that AI will be an important part of our work in the robotics network.” –Jason Del Rey

OpenAI introduces ChatGPT search

The rise of genetic AI made it clear that the days of conventional online search were numbered. OpenAI's latest announcement is perhaps the biggest salvo yet.

The San Francisco AI company announced Thursday that it would add a new set of search features to its flagship product ChatGPT. Synchronized – of course –ChatGPT SearchThese features allow users to search for and receive timely information with attribution to news publishers and other sources.

The new features leverage OpenAI's 4o model and are available to paid ChatGPT Plus and Teams users across mobile and web. The company says its enterprise and education customers, and subsequently free users, are expected to follow suit in the coming weeks and months, respectively. Approximately 250 million people use ChatGPT every week.

How do existing search giants Google and Microsoft (a leading OpenAI investor) address the existential threat? Of course, by integrating conversational AI into their search products. Game runs very well. -A

Apple sales rise 6% as iPhone demand rebounds

Apple on Thursday reported a 6% rise in fiscal fourth-quarter revenue as iPhone sales rebounded.

The company reported growth in all business segments except the category that includes wearable devices. Total revenue rose year-on-year to $94.9 billion in the three months ended Sept. 28, slightly above Wall Street estimates of $94.6 billion.

And the iPhone? Sales of Apple's all-important product rose 5.4% to $46.2 billion, reversing declines in two consecutive quarters. (Apple released its new iPhone 16 in September, so these results only included about a week's worth of sales.) Apple CEO Tim Cook said in a conference call that iPhone sales set a sales record in September, with growth across all geographic segments.

The only Apple business category to see a decline in the quarter was its wearables, home devices and accessories group, which includes the Apple Watch, AirPods and the pricey Apple VisionPro headset. The unit's net sales fell 3% year over year to $9 billion. – Kali Hays

China sanctions the largest US drone manufacturer

China has announced sanctions against Skydio, the company announced on Wednesdayfor selling drones to Taiwan. Their only customer in the Republic is the National Fire Agency.

“We are proud to support critical infrastructure operators, first responders and allied militaries around the world,” wrote CEO Adam Bry in a blog post. “We are proud to support Taiwan and we will not be deterred.” Skydio, based in the San Francisco Bay Area, is the largest drone manufacturer in the United States and a supplier to the U.S. and Ukrainian militaries.

The sanctions put Skydio in a supply chain crunch. Although its drones are made in the U.S., the batteries that power them are “one of the few components we have not yet brought out of China,” Bry wrote. Beijing is hitting them where it hurts: Skydio is mining a “significant stockpile” of batteries and is looking for alternative suppliers, but still has to ration batteries to one per drone.

A Financial Times report says Skydio asked Biden administration for help; As trade tensions between the U.S. and China continue, American officials are concerned about disrupting supply chains as a lever. Congress is currently considering the legislation that would ban DJI dronesbased in Shenzhen, from doing business in the USA -A

Intel is surging after better-than-expected results

Intel shares rose about 7% in after-hours trading on Thursday following the chipmaker's announcement reported earnings and forecast that exceeded Wall Street's expectations.

Intel reported a profit of 17 cents on revenue of $13.28 billion – a decline of 6% from the year-ago quarter. Not surprisingly, given the major restructuring of the Silicon Valley icon under CEO Pat Gelsinger, the company booked $2.8 billion in restructuring charges and $15.9 billion in impairment charges during the quarter.

Gelsinger said in a conference call that Intel expects to cut its headcount by 16,500 – cuts were announced in August – and reduce its real estate holdings. All of this should be completed by the fourth quarter of 2025.

Intel still has a target on its back. A potential takeover by Qualcomm or another competitor — or disruption from circling activist investors — is hardly off the table as the company works to stay afloat and boost its stock price.

But managing expenses will only go so far. Intel announced its Xeon 6 server processors and Gaudi AI accelerators during the quarter; Gelsinger said in the call that acceptance of Gaudi has been slower than expected. -A

More data

—Microsoft hires Facebook's former technical chief. Jay Parikh will report to CEO Satya Nadella.

—Google's Android 16 is coming months earlier than expected: 2Q25. To better adapt to the device launches, my dear.

—Nvidia's Run:ai takeover is being examined by the EU after Italian regulators hit the brakes.

—Uber shares fall after earnings announcement that higher prices have slowed growth.

—Anthropic calls for “targeted regulation” of AI. It is said that the window of opportunity for political action is closing quickly.

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