Washington bans Chinese AI model DeepSeek, Microsoft abandons major UK project: The week’s key developments

Netflix reportedly offered Microsoft $500 million for a seven-year deal to adapt Xbox characters, but Microsoft countered with an $800 million offer, leading to a breakdown in negotiations. Xbox stated they have received significant interest in their intellectual property and are pursuing smaller deals with multiple partners. Microsoft has existing partnerships for adaptations of 'Halo,' 'Call of Duty,' 'Fallout,' and 'Minecraft,' among others.

Microsoft's Xbox reportedly turned down a $500 million Netflix deal for exclusive rights to its IP, asking for $800 million instead. Netflix withdrew the offer. Xbox denies the deal's failure, citing other partnerships and record interest in its IP. The company is now pursuing smaller deals with multiple partners. According to an industry insider, this may have led to the creation of a new cross-media department.

Microsoft's Xbox COO Helen Chiang is leaving, according to an internal memo. Xbox CEO Asha Sharma had previously announced Chiang's expanded responsibilities. Meanwhile, Microsoft is preparing for its next-gen Project Helix console, expected to include a handheld device in 2027 and a console in 2028, with high production costs. Xbox has been restructuring, cutting jobs amid industry challenges.

AWS reported that customers have booked most of its 2027 capacity, with $220B planned for 2026 capital spending. NVIDIA and TCV invested in Higgsfield's Series B extension, with Higgsfield reporting a $1B annualized revenue run rate. Western Digital reported $4.381B in Q1 revenue, up 55% YoY, with a 57.8% gross margin.

Amazon CEO Andy Jassy stated that AWS computing capacity for 2027 is largely booked, with a 'good chunk' of 2028 also sold. AWS revenue grew 37% to $42.2 billion in Q2 2026. Amazon plans $220 billion in capex for 2026, with free cash flow at a $7.6 billion outflow. Analysts have a Strong Buy consensus with a $331.46 average price target. Q3 earnings are expected on October 29, 2026.

Microsoft (MSFT) reports Q1 earnings on October 28, with guidance for over $50B in capital spending. Azure revenue grew 43% to $100B annually, but costs rose, with capex at $41B. Analysts expect double-digit growth across metrics. Key focuses include Azure growth, AI spending, Copilot monetization, and OpenAI exposure.