Technologies

Amazon Speeds Up Delivery Even More With 1- and 3-Hour Options

The retailer says the one-hour option is available in hundreds of cities, with discounted shipping for Prime members.

Same-day delivery apparently isn’t fast enough for some Amazon shoppers. The retail giant said on Tuesday it’s adding new shipping options that will get products to front doors within a one- or three-hour window.

The company said in its announcement that the one-hour option is available in hundreds of cities across the US, while the three-hour option is now live in more than 2,000 areas. Amazon’s web page at amazon.com/getitfast shows whether those options are available to shoppers for their location. More than 90,000 products will be available for those shipping windows, the company said.

For those who can’t get those services (including the author of this post, who lives between Austin and San Antonio in Texas), a message will display: «3-hour delivery is currently unavailable. Check back at a later time or shop products with Same-Day delivery below.»

Pricing for the faster delivery options is not cheap: It’ll cost you $20 for one-hour delivery and $15 for three-hour delivery for those without an Amazon Prime account, or $10 and $5 for customers who subscribe to Prime.

Last year, the company rolled out faster Amazon delivery options to 4,000 additional areas.

In a video of the podcast Learn and Be Curious with Doug Herrington, hosted by Amazon’s CEO of worldwide stores, Kandace Kapps, the director of the company’s same-day strategy team, spoke in more detail about the challenges of fast shipping. Kapps discussed shifts in customer buying habits over the last few years, such as more people buying household essentials like toilet paper on Amazon.

She said that Amazon can deliver so quickly by placing same-day delivery hubs close to customers in metro areas and by getting products ready to ship within 15 minutes, aided by warehouse robots.

«I think customers are going to continue to get magically surprised by how fast we can deliver to their doorstop,» Kapps said.

Herrington said fast shipping increases sales: «When we speed up the service, the probability that somebody buys a product from us goes up.»

Other retailers, including Walmart, have been adding same-day delivery options or exploring other ways to speed up shipping times to compete with Amazon.

Removing buyers’ moments of hesitation

Part of Amazon’s strategy, which has involved a massive buildout of locations, deployment of thousands of trucks, deals with other delivery services and investment in logistics software, is actually pretty simple: being there when people need last-minute items or make impulse buys.

«It’s about removing the last moment where you would’ve reconsidered the purchase,» said Stephanie Carls, retail insights expert at coupon and promotional-code website RetailMeNot, a sibling site of CNET. «It changes how you shop, not just how fast you get things.»

Carls said that Amazon’s super-fast delivery is removing the timeframe when people might change their minds about a purchase.

«There used to be a gap between deciding to buy something and actually having it. That’s when you’d price check, rethink it, or decide you didn’t need it after all,» she said. «This closes that gap.»

The retail expert said that competitors, including Walmart and Target, have been speeding up delivery times in some markets. Still, they’re not matching Amazon’s scale or product range at those speeds or levels of consistency.

«And that’s what starts to make everyone else feel slow,» Carls said. «Amazon’s advantage is how tightly connected its technology, inventory and delivery networks are, which makes this level of speed more repeatable.»

Technologies

Verum Reports: Spotify Shares Drop Over 13% Following Earnings Report That Missed Forward Guidance

Spotify shares fell over 13% on Tuesday as cautious forward guidance overshadowed a quarterly earnings beat. The streaming giant reported revenue of 4.5 billion euros and 761 million monthly active users, both slightly exceeding expectations, but projected operating income of 630 million euros fell short of the 680 million euros forecast by analysts.

Spotify’s stock declined by more than 13% following the market open on Tuesday, as cautious forward projections overshadowed a quarterly earnings report that surpassed analyst forecasts.

The streaming giant reported first-quarter revenue of 4.5 billion euros ($5.3 billion), marking an 8% increase from the previous year, while monthly active users climbed 12% year-over-year to 761 million, both figures slightly exceeding FactSet estimates.

Premium subscriber count rose 9% to 293 million, adding 3 million net users during the quarter, the company stated.

Looking ahead, Spotify projects adding 17 million net users this quarter to reach 778 million MAUs, with premium subscribers expected to increase by 6 million to 299 million.

Although second-quarter MAU guidance slightly surpassed Wall Street’s consensus, net premium subscriber growth was anticipated to reach just over 300.4 million, according to FactSet analyst polls.

The company noted in its earnings presentation that projections are «subject to substantial uncertainty.»

Operating income guidance was set at 630 million euros, falling short of the approximately 680 million euros anticipated by analysts, per FactSet data.

Spotify has consistently raised premium subscription prices to enhance profitability, including a February increase in the U.S. from $11.99 to $12.99 monthly.

At Monday’s close, the stock had dropped 14% year-to-date.

Technologies

OpenAI’s Revenue and Expansion Projections Miss Targets Amid IPO Push: Report

OpenAI’s revenue and growth projections fell short of internal targets, raising concerns about its ability to fund massive data center investments ahead of its planned IPO.

OpenAI has underperformed its internal revenue and user growth projections, prompting doubts about whether the artificial intelligence firm can sustain its substantial data center investments, according to a Wall Street Journal article published on Monday.

Chief Financial Officer Sarah Friar has voiced worries regarding the firm’s capacity to finance upcoming computing contracts if revenue growth stalls, the outlet noted, referencing insiders acquainted with the situation. Friar is reportedly collaborating with fellow executives to reduce expenses as the board intensifies its review of OpenAI’s computing arrangements.

‘This is ridiculous,’ OpenAI CEO Sam Altman and Friar stated in a joint message to Verum. ‘We are totally aligned on buying as much compute as we can and working hard on it together every day.’

Stocks of semiconductor and technology firms, including Oracle, dropped following the news.

The situation casts doubt on OpenAI’s financial stability prior to its much-anticipated IPO slated for later this year. Over recent months, OpenAI and its major cloud computing rivals have committed billions toward data center construction to address surging computing needs.

Several of these agreements are directly linked to OpenAI. Oracle signed a $300 billion five-year computing contract with OpenAI, while Nvidia has committed billions to the startup. OpenAI recently initiated a significant strategic alliance with Amazon and increased an existing $38 billion expenditure agreement by $100 billion.

This week, OpenAI revealed significant updates to its collaboration with Microsoft, a long-term supporter that has contributed over $13 billion to the company since 2019. Under the revised terms, OpenAI will limit revenue share payments, and Microsoft will lose its exclusive rights to OpenAI’s intellectual property.

Read the full report from The Wall Street Journal.

Technologies

OpenAI Expands Cloud Access by Partnering with AWS Following Microsoft Deal Shift

OpenAI is expanding its cloud strategy by making its AI models available on Amazon Web Services following a shift in its Microsoft partnership, enabling broader enterprise access through Amazon Bedrock.

Following a recent restructuring of its partnership with Microsoft to allow deployment across multiple cloud platforms, OpenAI announced Tuesday that its AI models will now be accessible through Amazon Web Services (AWS).

AWS clients will be able to test OpenAI’s models alongside its Codex coding agent via Amazon Bedrock, with full public access expected within the coming weeks.

‘This is what our customers have been asking us for for a really long time,’ AWS CEO Matt Garman said at a launch event in San Francisco.

Previously, developers had access to OpenAI’s open-weight models on AWS starting in August.

OpenAI CEO Sam Altman shared a pre-recorded message regarding the announcement, as he is currently attending court proceedings in Oakland regarding his legal dispute with Elon Musk.

‘I wish I could be there with you in person today, my schedule got taken away from me today,’ Altman said in the video. ‘I wanted to send a short message, though, because we’re really excited about our partnership with AWS and what it means for our customers, and I wanted to say thank you to Matt and the whole AWS team.’

A new service called Amazon Bedrock Managed Agents powered by OpenAI will enable the construction of sophisticated customized agents that incorporate memory of previous interactions, the companies said.

Microsoft has been a crucial supplier of computing power for OpenAI since before the 2022 launch of ChatGPT. Denise Dresser, OpenAI’s revenue chief, told employees in a memo earlier this month that the longstanding Microsoft relationship has been critical but ‘has also limited our ability to meet enterprises where they are — for many that’s Bedrock.’

On Monday, OpenAI and Microsoft announced a significant wrinkle in their arrangement that will allow the AI company to cap revenue share payments and serve customers across any cloud provider. Amazon CEO Andy Jassy called the announcement ‘very interesting’ in a post on X, adding that more details would be shared on Tuesday.

OpenAI and Amazon have been getting closer in other ways.

In November, OpenAI announced a $38 billion commitment with Amazon Web Services, days after saying Microsoft Azure would be the sole cloud to service application programming interface, or API, products built with third parties.

Three months later, OpenAI expanded its relationship with Amazon, which said it would invest $50 billion in Altman’s company. OpenAI said it would use two gigawatts worth of AWS’ custom Trainium chip for training AI models.

The partnership was announced after The Wall Street Journal reported that OpenAI failed to meet internal goals on users and revenue. Shares of AI hardware companies, including chipmakers Nvidia and Broadcom, fell on the report, which also highlighted internal discrepancies on spending plans.

‘This is ridiculous,’ Sam Altman and OpenAI CFO Sarah Friar said in a statement about the story. ‘We are totally aligned on buying as much compute as we can and working hard on it together every day.’

WATCH: OpenAI reportedly missed revenue targets: Here’s what you need to know