Amazon reported better-than-expected second-quarter earnings on Thursday, and investors loved what they saw. Net sales rose 20%, and cloud revenue stood out as a particular bright spot. This combination of positive results was enough to send Amazon’s stock up nearly 10% in after-hours trading.

Crucially, Amazon isn’t slowing down on data center spending, despite the conventional wisdom that investors want companies to rein it in.

One line item, in particular, illustrates Amazon’s appetite for investing in infrastructure. Amazon spent $173 billion for the fiscal year ended June 30 on property and equipment — a category that covers GPUs, natural gas turbines, and plots of land — up from $107.65 billion from the year before

It also raised its 2026 capex forecast from $200 billion to $220 billion — even as it has begun dipping into its cash reserves to help cover the cost. The company ended the quarter with $7.6 billion less cash than it had 12 months ago, marking its first period of negative free cash flow this year.

Under normal circumstances, ballooning expenses would be a tough pill for investors to swallow. But Amazon has a revenue engine that helps justify the spending. AWS revenue rose 37% year over year, clocking $42 billion for the quarter. That’s not enough to balance out the capex spending in raw arithmetic, but it shows that demand is growing alongside supply. Given the years-long time lag between breaking ground on a data center and selling its capacity, that’s reassuring for investors.

Critically, Amazon’s AI play isn’t limited to building large data centers. The company is also making serious long-term bets on chips like the Trainium TPU and the Arm-based Graviton processor. Those projects don’t show up in capex numbers, but they can meaningfully improve margins for the company’s cloud business.

“We see the AI business following very much the same margin trajectory we saw in the core business before,” Jassy said during the company’s Q2 earnings call. “AWS and Amazon Bedrock can have a wildly successful business without its own frontier model, and the reason is that there’s not going to be a single model to rule them all.”

This dynamic isn’t unique to Amazon. We saw similar patterns at Microsoft and Google, whose shares also popped after reporting strong cloud revenue. By the same token, companies like Meta which have significant capex and no clear revenue source, are still experiencing intense skepticism from investors. Meta’s stock fell 8% after earnings this week, as investors focused on its cash flow crunch and continued spending,

Of course, investors like revenue and don’t like expenses — that’s how markets work. But it’s important not to miss the broader lesson about the AI economy. Right now, investors are treating cloud hosts as the most reliable part of the AI stack, while remaining skeptical about the underlying economics for AI labs and AI startups.

But Amazon’s hosting revenue is someone else’s AI bill. In Anthropic’s case, it’s literally the same money.

If that spending isn’t sustainable for the big labs and their clients, the revenue won’t be stable for Amazon and the other cloud hosts. There’s real competition and differentiation at every level of the stack, but if demand for AI doesn’t hold up, it’s going to be a bad time for everyone.

In the end, it all comes back to David Cahn’s $3 trillion question. There’s either enough demand to justify this buildout or there isn’t. Cloud-hosting services like AWS may be a few steps removed from that demand problem, but that doesn’t mean they’re insulated from it.

During a Thursday hearing, a judge said the Trump administration hasn’t presented enough evidence to justify labeling Anthropic a supply chain risk and banning the federal government from using the company’s technology.

Bloomberg and Axios were among the first to report the news. 

The dispute stems from stalled contract negotiations between Anthropic and the Department of Defense. Anthropic said it didn’t want its AI used for mass surveillance of Americans or for targeting or firing decisions involving lethal weapons, arguing the technology wasn’t ready. The Pentagon countered that a private company shouldn’t dictate how the military uses technologies, and said it would use the tools in “lawful” ways.

The government has also argued that Anthropic’s public criticism of the DoD justifies the ban — logic that U.S. District Judge Rita Lin called “really troubling,” warning it could set a precedent of retaliating against federal contractors who disagree with the administration. 

The DOD further claimed Anthropic could potentially disable or alter its AI models during warfighting operations — a claim that experts say lacks evidence. Lin agreed, saying she saw no proof Anthropic could alter a delivered model or “flip some kind of kill switch.”

Thursday’s hearing was part of one of two lawsuits Anthropic filed against the DOD in March, challenging the ban and risk designation. The other is being heard in Washington. 

Lin, who temporarily blocked the ban in March, is now weighing whether to make that order permanent. 

Hundreds of thousands of people are receiving letters notifying them that their medical records were stolen in a cyberattack at U.S. health tech giant CareCloud earlier this year, as new details about the data breach come to light.

The company has said little about the breach since March, when it first admitted that hackers had raided one of its six stores of patient data. New disclosures seen by TechCrunch offer the clearest picture of the breach so far, including that nearly 350,000 people have been affected so far.

The New Jersey-based CareCloud stores patient records for more than 45,000 providers across the U.S., including doctors’ offices, hospitals, and other medical practices. As such, the company handles a large amount of sensitive medical and billing data on millions of healthcare patients across the country.

According to a data breach notice filed with California’s attorney general’s office this week, CareCloud said hackers had access to one of its electronic health record data stores for at least six days, between March 10 and March 16. The company said a hacker “claimed to have exfiltrated data from databases.” The company did not say how the hackers made the claim, but it’s not uncommon for hackers to share samples of stolen data with victims alongside a ransom demand to prevent it from being published online.

TechCrunch is unaware of any ransomware or extortion group publicly taking credit for the data breach at CareCloud.

The notice said little about the hack beyond its initial March 27 disclosure to regulators, but confirmed TechCrunch’s earlier report that the hackers broke into the company’s data storage hosted on Amazon Web Services.

TechCrunch has learned that the data breach affects at least 345,000 people across the United States, according to listings with several attorneys general, including those in New Hampshire, Massachusetts, and Texas. TechCrunch has also obtained CareCloud’s disclosure filed with Maine’s attorney general. 

The number of affected people is likely to rise as more disclosures are filed with state authorities. 

The notices confirm that CareCloud notified authorities that the stolen data included people’s names, postal addresses, and Social Security numbers, as well as government-issued identification numbers, such as passports and driver’s licenses. The notices also say that the stolen data included financial information, such as bank account information and payment card numbers, alongside a wealth of medical and health-related information.

CareCloud chief executive Stephen Snyder did not respond to TechCrunch’s request for comment or to questions about the incident.

The cyberattack targeting CareCloud is the latest in a series of breaches targeting healthcare providers this year, including one at healthcare revenue tech giant TriZetto that affected 3.4 million people, and a month-long breach at New York’s public health provider NYC Health + Hospitals, in which hackers stole 1.8 million people’s health data and thousands of employees’ fingerprint scans.

Last week, U.K.-based tech provider Craneware, which provides accounting and billing software to thousands of U.S. healthcare providers, confirmed hackers stole a “significant volume” of its customers’ data from its servers, raising concerns about a breach involving patient data.

Do you know more about CareCloud’s data breach? Do you work at CareCloud and know about its security practices? Contact this reporter via encrypted message at zackwhittaker.1337 on Signal.