Amazon Web Services (AWS) has significantly outperformed Wall Street expectations, marking a noteworthy rebound in its growth, attributed largely to surging demand for cloud computing from the AI sector. The latest report indicates that AWS has achieved a year-over-year growth rate of 20.2%, generating $33.1 billion in revenue in the first nine months of the year, with operating income rising to $11.4 billion in the third quarter.
Andy Jassy, CEO of Amazon, highlighted this acceleration in growth, stating, “AWS is growing at a pace we haven’t seen since 2022.” He emphasized the robust demand for both AI and foundational infrastructure, noting that AWS has expanded its capacity by adding over 3.8 gigawatts in the past year. The firm recently opened a new infrastructure region in New Zealand and has plans for three additional regions.
During Q3, AWS secured multiple significant partnerships across various industries, particularly in the AI space. Notably, AWS collaborated with the AI browser company Perplexity to launch their enterprise product and formed a partnership with Cursor.
AWS’s competitors are also thriving, with reports of major cloud agreements, including a rumored $300 billion deal between OpenAI and Oracle, slated to start in 2027, along with a $30 billion annual contract for data center services. Google and Anthropic have also joined the fray with a cloud deal valued at tens of billions.
Despite concerns regarding the long-term sustainability of the cloud market and potential bubble dynamics, Jassy reassured investors, stating, “You’re going to see us continue to be very aggressive in investing capacity because we see the demand.” He emphasized that AWS is not only expanding its infrastructure but is also effectively monetizing these investments.
This positive news for AWS follows Amazon’s announcement of a reduction of 14,000 corporate jobs, as the company realigns its resources to bolster its AI initiatives.
