Cloudy with a chance of outages

If you tried to get ChatGPT’s take on your breakfast plans this morning, you probably got served something a lot less helpful than a menu.

Cloudflare suffered a major outage today, disrupting access to a wide range of websites and apps, including ChatGPT, Spotify, and even the New Jersey Transit authority. Cloudflare shares fell 2.83% this afternoon.

Often described as “the largest company you’ve never heard of,” Cloudflare manages and secures internet traffic so sites can load quickly and stay protected from overload or cyberattacks. The company said the outage began around 5:20 AM ET when it detected a sudden spike in unusual traffic. It added that there’s currently no evidence of a cyberattack or malicious activity.

By 9:57 AM, Cloudflare said the issue had been mostly resolved.

A familiar and growing problem

We’ve seen this movie before. Last year, CrowdStrike pushed a faulty software update that triggered what experts called the largest IT outage in history. Airlines suspended operations, hospitals lost access to patient records, and banks were locked out of critical systems. The fallout wiped about 11% off CrowdStrike’s stock price in a single day

Now, within a single month, we’ve seen three of the world’s biggest cloud provider pillars wobble: AWS, Azure, and Cloudflare. AWS suffered a daylong outage on October 20 due to DNS issues, disrupting everything from Disney+ to Reddit. Nine days later, Microsoft’s Azure platform went down for the same reason. Today’s Cloudflare outage adds yet another stress test to the internet’s reliability.

The twist this time is scale. Amazon and Microsoft carry market caps of $2.4 trillion and $3.6 trillion, respectively—far too large for a temporary outage to move their stocks meaningfully. But for specialized infrastructure firms like CrowdStrike, these incidents can shake customers’ faith and hurt the bottom line long after they’re resolved.

The internet isn’t as big as it looks

Today’s outage highlights just how dependent the modern internet—and the markets built on top of it—have become on a handful of providers. Even AI companies like OpenAI ultimately rely on Cloudflare, AWS, and Azure to stay online. A glitch at a lower layer can cascade upward, knocking out tools that millions now treat as essential.

This concentration isn’t accidental. "Due to cost of hosting web content, economic forces lead to consolidation of resources into a few very large players, but it is effectively putting all our eggs in one of three baskets," Cornell University professor Gregory Falco told BBC.

AWS controls roughly a third of the global cloud market, Azure holds about 20%, and Cloudflare routes and secures traffic for another 20% of the web. For investors, that concentration is a double-edged sword: These companies are incredibly efficient—until something breaks.—SY