Amazon's cloud business surges 28% as AI boom drives growth
Original: Amazon’s cloud business is surging — and so is its capital spending
Why This Matters
Demonstrates continued AI infrastructure demand driving major cloud provider growth
Amazon Web Services saw net sales increase 28% year-over-year to $37.6 billion in Q1 2026, marking the fastest growth rate in 15 quarters. CEO Andy Jassy attributed the surge to AI demand, with AWS AI revenue run rate exceeding $15 billion.
Amazon Web Services achieved its fastest growth in 15 quarters with 28% year-over-year increase to $37.6 billion in Q1 2026. CEO Andy Jassy said it's unusual for business to grow this fast on such a large base, comparing it to when AWS was half its current size. He noted AWS's AI revenue run rate exceeds $15 billion, nearly 260 times larger than AWS's total revenue three years after launch ($58 million). Amazon is increasing capital expenditures to support growth, with Jassy explaining AWS must invest upfront in land, power, buildings, chips, servers, and networking gear before monetization. He positioned these as short-term investments for long-term returns, noting data centers last 30+ years while hardware has 5-6 year useful life.