Andy Jassy has made it known that he believes AWS can be a trillion-dollar revenue business. During Amazon’s quarterly earnings call on Thursday, he repeated this ambition. There has never been a business with a trillion dollars of annual revenue,” he said.
However, before the cloud business gets there, Amazon is going to have ramp up its capital expenditures to build out the infrastructure necessary to support that blossoming business. Amazon’s big spending on its AI infrastructure buildout has been an ongoing source of concern for investors this year. Indeed, during Thursday’s call, Wall Street analysts repeatedly asked Jassy to explain the spending, the signals that the growth really will come, and the profit margins expected.
Jassy told them it was all money well spent because the e-commerce giant planned to capitalize on a historic moment in global cloud demand driven by AI. AWS revenue increased 39 percent from the year-ago quarter, a trend of steady growth for the sixth straight quarter. And the CEO forecast on the call that it would increase by 40% not just next year, but in 2028, too.
It will forever change our revenue.” Investors, however, remained concerned. Shares were down about 6% on Thursday in after-market trading. The AI boom has been a mixed blessing for the cloud industry, since 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. It, too, has spent a bundle.
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