AWS Could Become a $1 Trillion Business, Amazon CEO Says

Amazon CEO Andy Jassy said during the company's quarterly earnings call that AWS could become a trillion-dollar revenue business within five to 10 years. He also said Amazon expects about $220 billion in 2026 cash capital expenditures, mostly for AWS, and expects to spend meaningfully more in 2027. Shares fell about 6% in after-market trading as investors remained concerned about the spending.

Growth and spending plans

Jassy said AWS is a $184 billion annualized revenue run-rate business. AWS revenue increased 39 percent from the year-ago quarter, marking steady growth for the sixth straight quarter. He forecast that AWS could grow north of 40 percent in each of 2027 and 2028, and he said the company has a clear line of sight to attract its financial returns.

AI demand and investor concerns

Jassy said Amazon is in the very early days of AI adoption by enterprises and that its strategy is working. He described the AI boom as a once in a lifetime opportunity that required, and was worth, such a big financial commitment now. He said Amazon will invest to continue being the leader, can fund the plan, and believes it will forever change the size of Amazon and its revenue. Wall Street analysts repeatedly asked him to explain the spending, the signals that growth really will come, and the profit margins expected. Investors remained concerned and shares were down about 6% on Thursday in after-market trading.

Cloud rivals also spending

The AI boom has been a mixed blessing for the cloud industry because the AI services that undergird the boom are supported by cloud infrastructure. Like Amazon, other cloud providers are spending big but also earning big. Microsoft, for instance, just posted yet more record-breaking revenue growth, driven largely by its cloud business, and it too has spent a bundle.

Sources: TechCrunch