A widespread outage at Amazon Web Services brought parts of the internet to a standstill this week, costing major U.S. companies millions of dollars per hour and exposing just how vulnerable the digital economy has become to a single provider. From airlines and streaming giants to e-commerce platforms and banks, the disruption rippled through industries, underscoring the immense dependency businesses have placed on Amazon’s cloud backbone.
While some companies may be able to recover part of their losses through insurance, experts warn that such claims often come with limitations. The AWS outage affected thousands of businesses across the globe, halting or slowing key online services, from social media platforms and food delivery apps to streaming sites, online games, and even financial transactions. The incident showed how deeply daily life and business operations now depend on the stability of a few major cloud providers.
Calculating the exact financial damage from such an outage is complex, but data firm Tenscope has tried to offer an estimate. As per TechRadar, global businesses could be losing roughly $75 million for every hour that major websites are down.
Amazon itself is believed to be taking the biggest hit, with potential losses of about $72 million per hour. These figures underline just how costly even a few hours of cloud disruption can be for companies that depend on AWS to keep their operations running.
Other popular platforms were also affected, with Snapchat losing nearly $612,000 per hour, Zoom around $533,000, Roblox approximately $411,000, and Fortnite about $400,000. Design and collaboration tools were not spared either, with Canva seeing losses of $342,000 per hour and Slack around $194,000. Even social media giant Reddit faced roughly $148,000 in losses per hour, underlining how a single cloud outage can ripple across diverse sectors of the internet.
READ: Amazon Web Services outage disrupts Snapchat, Reddit, Alexa (
Insurance may help some companies recover a portion of their losses from the AWS outage, but experts say the process is rarely straightforward. Claims can take time to process, and many policies include fine print that limits coverage for digital disruptions. As a result, while insurance might ease the financial blow for some, it’s unlikely to cover the full extent of the damage caused by the large-scale cloud failure.
“For major businesses, hours of cloud downtime translate to millions in lost productivity and revenue. Yet many policies don’t trigger unless an outage lasts eight hours or more,” Ryan Griffin, US cyber practice leader at McGill and Partners, told techradar.com.
“We’re seeing a gap between operational exposure and insurance response and it’s the same pattern that emerged after CrowdStrike. The market is experimenting with parametric options, but adoption remains low,” Griffin added.
“The main reason for this issue is that all these big companies have relied on just one service,” said Nishanth Sastry, director of research at the University of Surrey’s Department of Computer Science.
By Monday evening, Amazon confirmed that it had resolved the massive outage that disrupted its cloud computing service for several hours, restoring access to affected platforms and applications across the globe. The company said its systems were gradually returning to normal, bringing relief to businesses and users who had faced hours of downtime. The incident, however, served as a stark reminder of how much of the world’s digital infrastructure depends on a handful of cloud providers to keep the internet running smoothly.
READ: Attack on Elon Musk? X outage hits as Tesla shares tank (
The outage marked the most significant internet disruption since last year’s CrowdStrike glitch, which had crippled systems across hospitals, banks, and airports, once again exposing the fragility of global digital networks. This incident also added to AWS’s growing list of troubles, it was the third major breakdown in the past five years traced back to its northern Virginia data hub, known as US-EAST-1, a crucial region that supports a large share of the world’s online infrastructure.
According to Ookla, the company behind Downdetector, more than four million users worldwide reported problems linked to the outage, underscoring how widespread the disruption had become across digital platforms, cited by Reuters.
The outage was traced to an issue within the Domain Name System (DNS), the mechanism that helps applications locate the right online addresses. In this case, the failure disrupted access to AWS’s DynamoDB API, a key cloud database service used by many companies to store user data and other essential information. The glitch prevented apps and websites from connecting properly, leading to widespread downtime across multiple industries.
This is not the first time a disruption in Amazon’s core cloud services has had a major global impact. In 2023, several well-known websites and online platforms briefly went offline after a similar issue. The company’s most severe outage in recent years occurred in late 2021, when critical systems such as airline bookings, car dealerships, payment apps, and streaming platforms were down for more than five hours.
AWS has also faced other significant service interruptions in 2020 and 2017, raising ongoing concerns about the reliability of the cloud infrastructure that powers much of the modern internet.