Category: Business Wires

  • Massive Amazon cloud outage has been resolved after disrupting internet use worldwide

    Massive Amazon cloud outage has been resolved after disrupting internet use worldwide

    LONDON — Amazon says a massive outage of its cloud computing service has been resolved as of Monday evening, after a problem disrupted internet use around the world, taking down a broad range of online services, including social media, gaming, food delivery, streaming and financial platforms.

    The all-day disruption and the ensuing exasperation it caused served as the latest reminder that 21st century society is increasingly dependent on just a handful of companies for much of its internet technology, which seems to work reliably until it suddenly breaks down.

    About three hours after the outage began early Monday morning, Amazon Web Services said it was starting to recover, but it wasn’t until 6 p.m. Eastern that “services returned to normal operations,” Amazon said on its AWS health website, where it tracks outages.

    AWS provides behind-the-scenes cloud computing infrastructure to some of the world’s biggest organizations. Its customers include government departments, universities and businesses, including The Associated Press.

    Cybersecurity expert Mike Chapple said “a slow and bumpy recovery process” is “entirely normal.”

    As engineers roll out fixes across the cloud computing infrastructure, the process could trigger smaller disruptions, he said.

    “It’s similar to what happens after a large-scale power outage: While a city’s power is coming back online, neighborhoods may see intermittent glitches as crews finish the repairs,” said Chapple, an information technology professor at the University of Notre Dame’s Mendoza College of Business.

    Amazon blames domain name system

    Amazon pinned the outage on issues related to its domain name system that converts web addresses into IP addresses, which are numeric designations that identify locations on the internet. Those addresses allow websites and apps to load on internet-connected devices.

    DownDetector, a website that tracks online outages, said in a Facebook post that it received over 11 million user reports of problems at more than 2,500 companies. Users reported trouble with the social media site Snapchat, the Roblox and Fortnite video games, the online broker Robinhood and the McDonald’s app, as well as Netflix, Disney+ and many other services.

    The cryptocurrency exchange Coinbase and the Signal chat app both said on X that they were experiencing trouble related to the outage.

    Amazon’s own services were also affected. Users of the company’s Ring doorbell cameras and Alexa-powered smart speakers reported that they were not working, while others said they were unable to access the Amazon website or download books to their Kindle.

    Many college and K-12 students were unable to submit or access their homework or course materials Monday because the AWS outage knocked out Canvas, a widely used educational platform.

    “I currently can’t grade any online assignments, and my students can’t access their online materials” because of the outage’s effect on learning-management systems, said Damien P. Williams, a professor of philosophy and data science at the University of North Carolina at Charlotte.

    The exact number of schools impacted was not immediately known, but Canvas says on its website it is used by 50% of college and university students in North America, including all Ivy League schools in the U.S.

    At the University of California, Riverside, students couldn’t submit assignments, take quizzes or access course materials, and online instruction was limited, the campus said.

    Ohio State University informed its 70,000 students at all six campuses by email Monday morning that online course materials might be inaccessible due to the outage and that “students should connect with their instructors for any alternative plans.” As of 7:10 p.m. Eastern, access was restored, the university told students.

    Record of past outages

    This is not the first time issues with Amazon cloud services have caused widespread disruptions.

    Many popular internet services were affected by a brief outage in 2023. AWS’s longest outage in recent history occurred in late 2021, when a wide range of companies — from airlines and auto dealerships to payment apps and video streaming services — were affected for more than five hours. Outages also happened in 2020 and 2017.

    The first signs of trouble emerged at around 3:11 a.m. Eastern time, when AWS reported on its “health dashboard” that it was “investigating increased error rates and latencies for multiple AWS services in the US-EAST-1 Region.” Later, the company reported that there were “significant error rates” and that engineers were “actively working” on the problem.

    Around 6 a.m. Eastern time, the company reported seeing recovery across most of the affected services and said it was seeking a “full resolution.” As of midday, AWS was still working to resolve the trouble.

    Sixty-four internal AWS services were affected, the company said.

    Just a few companies provide most internet infrastructure

    Because much of the world now relies on three or four companies to provide the underlying infrastructure of the internet, “when there’s an issue like this, it can be really impactful” across many online services, said Patrick Burgess, a cybersecurity expert at U.K.-based BCS, The Chartered Institute for IT.

    “The world now runs on the cloud,” Burgess said.

    And because so much of the online world’s plumbing is underpinned by so few companies, when something goes wrong, “it’s very difficult for users to pinpoint what is happening because we don’t see Amazon, we just see Snapchat or Roblox,” Burgess said.

    “The good news is that this kind of issue is usually relatively fast” to resolve, and there’s no indication that it was caused by a cyberattack, Burgess said.

    “This looks like a good old-fashioned technology issue. Something’s gone wrong, and it will be fixed by Amazon,” he said.

    There are “well-established processes” to deal with outages at AWS, as well as rivals Google and Microsoft, Burgess said, adding that such outages are usually over in “hours rather than days.”

  • Regional banks’ bad loans spark concerns on Wall Street

    Regional banks’ bad loans spark concerns on Wall Street

    NEW YORK — Wall Street is concerned about the health of the nation’s regional banks, after a few of them wrote off bad loans to commercial customers in the last two weeks and caused investors to wonder if there might be more bad news to come.

    Zions Bank, Western Alliance Bank, and the investment bank Jefferies surprised investors by disclosing various bad investments on their books, sending their stocks falling sharply this week. JPMorgan Chase CEO Jamie Dimon added to the unease when he warned there might be more problems to come for banks with potentially bad loans.

    “When you see one cockroach, there are probably more,” Dimon told investors and reporters on Tuesday, when JPMorgan reported its results.

    The KBW Bank Index, a basket of banks tracked by investors, is down 7% this month.

    There were other signs of distress. Data from the Federal Reserve shows that banks tapped the central bank’s overnight “repo” facilities for the second night in a row, an action banks have not needed to take since the COVID-19 pandemic. This facility allows banks to convert highly liquid securities like mortgage bonds and treasuries into cash to help fund their short-term cash shortfalls.

    Zions Bancorp shares sank Thursday after the bank wrote off $50 million in commercial and industrial loans, while Western Alliance fell after the bank alleged it had been defrauded by an entity known as Cantor Group V LLC. This came on top of news from Jefferies, which told investors it was might experience millions of dollars in losses from its business with bankrupt auto parts company First Brands.

    All three stocks recovered a bit Friday. Jefferies’ CEO told investors that the company believes it was defrauded by First Brands and that there were no broader concerns in the lending market.

    The last banking flare-up, in 2023, also involved midsize and regional banks that were overly exposed to low-interest loans and commercial real estate. The crisis caused Silicon Valley Bank to fail, followed by Signature Bank, and led to the eventual sale of First Republic Bank to JPMorgan Chase in a fire sale. Other banks like Zions and Western Alliance ended up seeing their stocks plummet during that time period.

    While banks do fail or get bought at fire sale prices, all bank deposits are insured by the Federal Deposit Insurance Corporation, up to $250,000 per account, in case of a bank failure. In the nearly 100 years since the FDIC was created in 1933, not one depositor has lost their insured funds.

    Still, even the larger banks aren’t immune in this latest round of trouble. Several Wall Street banks disclosed losses this week in the bankruptcy of Tricolor, a subprime auto dealership company that collapsed last month. Fifth Third Bank, a larger regional bank, recorded a $178 million loss from Tricolor’s bankruptcy.

    That said, the big banks believe that any losses will be manageable and do not reflect the broader economy.

    “There is no deterioration, we’re very confident with our credit portfolio,” Deutsche Bank CEO Christian Sewing said, in an interview on Bloomberg Television on Friday.

    While the big Wall Street banks get most of the media and investor attention, regional banks are a major part of the economy, lending to small- to medium-sized businesses and acting as major lenders for commercial real estate developers. There are more than 120 banks with between $10 billion and $200 billion in assets, according to the FDIC.

    While big, these banks can run into trouble because their businesses are not as diverse as the Wall Street money center banks. They’re often more exposed to real estate and industrial loans, and don’t have significant businesses in credit cards and payment processing that can be revenue generators when lending goes south.