Amazon(US:AMZN) CNBC·2025-11-26 02:11Core Viewpoint - Amazon is under federal investigation following an incident where one of its delivery drones damaged an internet cable in Texas, which raises concerns as the company aims to expand its drone delivery services amidst increasing competition from Walmart [1][2]. Incident Details - The incident occurred on November 18, 2023, when an Amazon MK30 drone, after delivering a package, got entangled in an internet cable while ascending from a customer's yard [3]. - A video confirmed that the drone sheared the cable, subsequently shutting off its motor and landing safely, sustaining minor damage to one propeller [4]. - Amazon acknowledged the incident, stating there were no injuries or significant internet outages, and they covered the repair costs for the damaged cable [5]. Regulatory Context - The Federal Aviation Administration (FAA) is investigating the incident, while the National Transportation Safety Board (NTSB) is aware but has not initiated a probe [4]. - This incident follows a previous investigation into a collision involving two Amazon drones and a construction crane in Arizona, which led to a temporary halt of drone deliveries in that area [6]. Drone Delivery Expansion - Amazon has been working on its drone delivery program for over a decade, aiming to fulfill founder Jeff Bezos' vision of rapid deliveries [7]. - The company began drone deliveries in 2022 in select locations and aims to deliver 500 million packages annually by the end of the decade [8]. - The MK30 drone is designed to be quieter, smaller, and lighter than its predecessors, equipped with a sense-and-avoid system to navigate obstacles [9]. Competitive Landscape - Amazon has recently expanded its drone delivery services to several locations, including Waco, Texas, and plans to extend to Richardson, Texas [10]. - Walmart has also entered the drone delivery market, partnering with companies like Alphabet's Wing and Zipline, increasing competition for Amazon [10].