Amazon’s cloud business is surging — and so is its capital…

It was the fastest growth rate for AWS in 15 quarters, Amazon president and CEO Andy Jassy said during the company’s earnings call. Amazon is already a leader, and companies continue to choose AWS for AI.” Jassy compared the business unit’s growth to the aughts. “To put our growth in perspective, three years after AWS launched, it had a $58 million revenue run rate. [During] the first three years of this AI wave, AWS’s AI revenue run rate is over $15 billion — nearly 260 times larger.” Even as money flows into its cloud business, Amazon is also sinking increasingly large gobs of capital into building out the infrastructure that supports that cloud. Jassy said on Wednesday that capital expenditure growth would continue in the near term. “The faster AWS grows, the more short-term capex we’ll spend,” he said. “AWS has to lay out cash for land, power, buildings, chips, servers, and networking gear, in advance of when we can monetize it.” Jassy positioned these investments as short-term cash burn for a long-term payoff, noting that these capital expenditures fund assets like data centers that last more than 30 years or chips, servers, and networking gear that have a useful life for five to six years.

He also provided more than a hint at how that kind of spending would affect free cash flow. “In times of very high growth like now — where the capex growth meaningfully outpaces the revenue growth — the early years, free cash flow is challenged,” he said. That’s a 95% drop from the $25.9 billion in free cash flow it had in the first quarter of 2025. “We’ve been through this cycle with the first big AWS growth wave, and like the results. OpenAI ends Microsoft legal peril over its $50B Amazon deal DeepMind’s David Silver just raised $1.1B to build an AI that learns without human data The Stanford freshmen who want to rule the world … will probably read this book and try even harder Two college kids raise a $5.1 million pre-seed to build an AI social network in iMessage Meta’s loss is Thinking Machines’ gain Google to invest up to $40B in Anthropic in cash and compute OpenAI releases GPT-5.5, bringing company one step closer to an AI ‘super app’

Source: TechCrunch