AWS installs an AI accelerator every 14 seconds and eyes $1 trillion annual revenue

Before long, we could be writing about a cloud company with a retail side hustle

Amazon Web Services will become a trillion-dollar business in five to ten years, and thanks to the AI boom Amazon CEO Andy Jassy thinks it should be able to grow by 40 percent or more in 2027 or 2028.

The cloud giant is already on track to generate $184 billion annual revenue this financial year, helped by 39.3 percent year-over-year growth that propelled Q3 revenue to a whisker short of $46 billion.

“It’s important to remember that the vast majority of global IT spend, about 85 percent, is still on premises, and we’re in a 10- to 20-year cycle where that equation will flip to the cloud,” he said on Amazon's Q3 earnings call.

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“Conventional wisdom has been that linchpin workloads like mainframes or storage area networks would never move to the cloud,” he observed, before triumphantly noting “these workloads are moving.”

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He thinks AI will help, too.

Jassy said the cloudy concern installs a new AI accelerator “about every 14 seconds, and almost as fast as we install capacity, customers are gobbling it up.” The outfit’s Bedrock AI services is already the fastest growing multi-billion dollar service in its history, Jassy said.

Core compute and storage services are also soaring: the CEO said revenue from both “grew at their fastest rates in several years.”

Jassy thinks the performance of Bedrock and core services are intertwined, because when users select AWS for AI workloads they want their cloudy inferencing rigs to be “near the rest of their data and apps.”

The CEO said AI workloads therefore “can’t help but drive core AWS demand because AI uses core for work like reinforcement learning, post-training, and tool usage, which can’t help but drive reinvestment back into our broader AWS functionality.”

He thinks this scheme is already working because margins for AI services are already “well ahead” of the figures AWS was able to achieve for its core services at a similar time in their evolution.

The company expects to make $220 billion of capital expenditure in 2026 and already spent $75.9 billion last quarter alone, most of that on AWS. Jassy said the cloud colossus is finding ways to more quickly pay for its infrastructure investments.

The CEO said it’s not easy to do that.

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“I think what we’re seeing with AI, it’s the biggest transformation in our lifetime,” he said. “Would it be more convenient if this type of acceleration and opportunity happened over 25 years and you could spread the CapEx over 25 years? Yeah, it might be more convenient, but that’s not the world that we live in, and that’s not the opportunity.”

“We can fund this plan. I think it will forever change the size of Amazon. It will forever change our revenue, it will forever change our free cash flow, and we’re going to invest, and we’re going to pursue it to continue to be the significant leader like we are today.”

Amazon needs AWS to land this plane, because the cloudy concern is growing much faster than the company’s retail and operations, which saw revenue rise six percent on far slimmer margins. Jassy could at least point to Prime Video becoming “a significant business with a revenue run rate in the tens of billions of dollars, [and is] now profitable in its own right.” 

Overall revenue was $180.17 bilion for the quarter.

So if the respective growth rates of AWS and the rest of Amazon continue, in a few years we could be talking about a cloud company with a retail side hustle. ®