Amazon Projects AWS Will Reach $1 Trillion Valuation

Amazon executives project that Amazon Web Services (AWS) will become a $1 trillion business within five to ten years. CEO Andy Jassy noted that core infrastructure and compute demand are growing at their fastest rate in years, while AWS CEO Matt Garman expects growth rates of 40% or more for the next two years. Garman reported a $184 billion run rate and a $580 billion backlog in committed spending, noting that demand is diversified across banking and healthcare rather than limited to AI labs like Anthropic and OpenAI.

To support this expansion, AWS is installing an accelerator chip every 14 seconds. The company plans to sell Trainium chips for on-premise workloads next year and has arranged $80 billion in supplier financing starting in 2027. AWS recently reported a 39.3% year-over-year revenue increase with a 38.7% margin.

However, these investments have impacted the parent company's financials. Amazon reported negative free cash flow following $210.7 billion in capital expenditures primarily dedicated to AI infrastructure. This spending has triggered investor concerns regarding the balance between heavy capital investment and near-term shareholder returns, as well as the potential for AI workloads to pressure future margins.