Andy Jassy said he believes AWS can generate revenue that could generate billions of dollars. During Amazon’s quarterly earnings conference call on Thursday, he reiterated that ambition.
“What we’re building at Amazon is unlike anything that’s been seen before. There’s never been a company with a trillion dollars in annual revenue,” he said.
However, before the cloud business can achieve this, Amazon will need to increase its capital spending to build the infrastructure necessary to support this thriving business.
“We still anticipate cash investments of approximately $220 billion for 2026 – the majority for AWS – and plan to spend significantly more in 2027, with a clear line of sight to attract its financial returns,” Jassy revealed on Thursday.
Amazon’s significant spending on developing its AI infrastructure has been a constant source of concern for investors this year. Indeed, on Thursday’s call, Wall Street analysts repeatedly asked Jassy to explain spending, signals that growth was actually going to happen, and expected profit margins.
Jassy told them it was money well spent, as the e-commerce giant planned to capitalize on a historic moment in global demand for cloud computing, driven by AI. AWS revenue increased 39% from last year’s quarter, a consistent growth trend for the sixth consecutive quarter.
And the CEO predicts that it will increase by 40% not only next year, but also in 2028.
“AWS represents $184 billion in annualized revenue, yet the opportunity remains extraordinary,” enthused Jassy. “With our continued pace of innovation, our new core and AI capabilities, enterprises wanting to run their core and AI workloads in AWS, and the amount of capacity we add each year, we believe AWS can grow more than 40% in 2027 and 2028, and generate $1 trillion in revenue over the next five to 10 years.
Jassy added that the company is “in the very early days” of enterprise adoption of AI and said that, so far, the “strategy is working.”
Later, when asked why the investment needed to develop AWS was so large, Jassy called the AI boom a “once-in-a-lifetime opportunity” that required and was worth such a significant financial commitment now.
“We will invest to continue to be a leader,” he declared. “We can finance this plan, and I think it will forever change the size of Amazon. It will forever change our revenue.”
Investors, however, remain worried. Shares were down about 6% in after-hours trading Thursday.
The AI boom has been a mixed blessing for the cloud industry, since the AI services that underpin this boom are supported by cloud infrastructure. Like Amazon, other cloud providers spend big but also win big. Microsoft, for example, has just recorded new record revenue growth, largely driven by its cloud business. He also spent a lot of money.
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