The Watson Weekly Weekend edition is sponsored by Avalara - the agentic AI platform automating global tax and compliance for leading eCommerce brands.

Saks Global has a $9B GMV target for 2030 and $1.2B in debt to carry while it gets there. The plan is on paper. The math is the problem.

At the worst of the vendor crisis, 720 brands stopped shipping to Saks because they weren't getting paid. That's not a rough patch. That's a trust collapse. Credit to the team for repairing a chunk of those relationships, because without product on the floor, none of the rest matters. But exiting bankruptcy this leveraged, with a growth plan that requires roughly doubling the business in five years, is how companies end up filing again. Debt service eats the oxygen that turnarounds need. The plan assumes a lot of things go right at the same time. They rarely do.

On to Victoria's Secret. Australian investor Brett Blundy's BBRC Worldwide has built a roughly 13% stake and wants two board seats gone, including chair Donna James and Miriam Naficy. The grievance is acquisitions like Adore Me. CEO Hillary Super is running what she's calling a "path to potential" strategy, leaning back into the Angels’ heritage with body positivity threaded through it. Fiscal 2025 sales are up 5%. That's real. Whether 5% is fast enough to keep an activist with 13% quiet is a different question. Activists don't usually buy into waiting politely.

Now the earnings, because this is where the bigger story is.

Alphabet posted $109B in Q1. Google Cloud grew 63% year-over-year to a $20B run rate, with a $462B backlog. Amazon did $181B. AWS came in at $37.5B, up 28%, and the chip business crossed its own $20B run rate. Shopify cleared $100B in quarterly GMV for the first time, with operating income up 88% on the back of all the layoffs and restructuring of the last two years.

Here's what I keep coming back to. Every operator I talk to is spending more on AI than they were a year ago. Compute costs aren't going down. They're going up, and the bills are landing at three addresses: Amazon, Nvidia, and the LLM owners. The infrastructure layer is collecting the rent. The businesses adopting AI are paying it, and the pricing power is not where the adoption is happening.

That's the through-line for the week. A retailer trying to grow its way out of debt. A retailer trying to grow its way past an activist. And a tech sector where the companies selling the picks and shovels are taking home most of the margin.

Three different stories. Same question underneath: who's actually getting paid?

Jessica Lesesky and I went deeper on all of this in this week's episode of The Watson Weekly Weekend edition. Worth the listen.