Jassy: AWS Could Become a $1 Trillion Business, but Heavy Spending Comes First

Amazon CEO Andy Jassy said on Thursday, during the company's quarterly earnings call, that he believes Amazon Web Services (AWS), its cloud computing unit, can become a business with $1 trillion in annual revenue within the next five to 10 years. Reaching that goal requires very large investment in infrastructure now, which is worrying investors in the e-commerce and technology group.

Heavy spending

Jassy confirmed that Amazon still expects cash capital expenditures of roughly $220 billion in 2026, with most of it going to AWS. He said spending will be meaningfully higher in 2027, with a clear line of sight to financial returns.

Spending on artificial intelligence (AI) infrastructure has been a recurring concern for investors this year. During the call, Wall Street analysts repeatedly asked Jassy to explain the outlay, the signals that growth will materialize, and the profit margins to expect.

Growth outlook

AWS revenue rose 39% from the same quarter a year earlier, marking the sixth consecutive quarter of steady growth. Jassy said AWS has an annualized revenue run-rate of $184 billion. He forecast growth of more than 40% in both 2027 and 2028.

The CEO said businesses are at a very early stage of adopting AI and that the strategy is working so far. He called the AI boom a once-in-a-lifetime opportunity that justifies the large commitment. He said the company can fund the plan and that it will forever change Amazon's size and revenue.

Investor reaction

Investors stayed cautious: Amazon shares dropped about 6% in after-market trading on Thursday. Other cloud providers are also spending heavily while earning heavily. Microsoft, for example, just reported another record revenue growth figure, driven largely by its cloud business, and it has also spent a great deal.