Amazon CEO Jassy: AWS will be a trillion-dollar business, but it requires massive investment

During Amazon's earnings call, CEO Andy Jassy emphasized that AWS could become a trillion-dollar revenue business in the future. However, stating that capital expenditures need to be increased to support AI infrastructure before reaching this goal, Jassy expressed that they expect approximately $220 billion in cash capital expenditures in 2026, with the majority for AWS, and foresee spending even more in 2027.

Andy Jassy reiterated his belief during Amazon's earnings call on Thursday that AWS possesses the potential for a trillion-dollar annual revenue. Stating that the cloud business needs increased infrastructure investments to reach this level, Jassy announced that cash capital expenditures in 2026 are expected to be around $220 billion, with significantly higher spending planned for 2027.

Amazon's massive spending on AI infrastructure continues to cause concern among investors this year. During Thursday's meeting, Wall Street analysts asked Jassy about the justification for the expenditures, signals that growth will materialize, and expected profit margins. Jassy argued that these expenditures translate into the right investment as the e-commerce giant plans to capitalize on the historical opportunity in AI-driven global cloud demand.

AWS revenues increased by 39% compared to the same quarter of the previous year, achieving a steady growth trend for the sixth consecutive quarter. CEO Jassy projected that thanks to the pace of innovation, new AI capabilities, and increasing capacity, AWS could record over 40% growth in each of 2027 and 2028, and become a trillion-dollar revenue business within the next five to ten years.

While investor concerns over the scale of spending persist, Amazon shares fell by about 6% in Thursday's after-hours trading. Similarly, other major cloud providers like Microsoft continue to report record revenue growth led by their cloud businesses while maintaining heavy spending on AI infrastructure.