Amazon CEO Andy Jassy predicts cloud revenue will reach $600 billion by 2036 thanks to AI

Thanks to artificial intelligence, Amazon.com’s cloud computing business is likely to reach $600 billion in annual revenue within the next 10 years, according to Amazon CEO Andy Jassy.

The bold prediction was made during an all-hands meeting with the company’s employees today. Jassy provided employees with comprehensive updates on the state of its business, including drone delivery, ad sales, and early AI products.

Before the AI ​​boom, Jassy envisioned Amazon Web Services becoming a run-rate company with $300 billion in annual revenue within the next 10 years, according to Reuters. “[But] “I think AWS has an opportunity to at least double that, given what’s happening with AI,” he said.

AWS still has a ways to go, but $600 billion is not unrealistic. In fiscal year 2025, AWS posted revenue of $128.7 billion, an increase of 19% year over year. To achieve Jassy’s new goal, it would need to grow sales at a rate of 17% per year over the next 10 years, which seems achievable. Jassy did not say how these sales would be distributed across the AWS division.

Cloud computing has long been Amazon’s most profitable business. Our high-margin, scalable cloud infrastructure stands in sharp contrast to our e-commerce business, which has lower margins and higher logistics costs, and has been able to consistently contribute a large portion of Amazon’s total operating income. In fiscal 2025, this revenue accounted for approximately 70% of the company’s total operating income, even though it generated only 17% of total revenue.

Mr. Jassy’s comments may help reassure nervous investors who have grown increasingly wary of the company’s ambitious spending plans. Earlier this year, the company pledged to invest $200 billion in capital spending in fiscal 2026, with most of the money going to AI data centers. This is believed to be the main reason Amazon’s stock price has fallen more than 6% since the beginning of the year.

During the meeting, Mr. Jassy participated in a Q&A with employees, one of whom noted that the company’s spending was “getting a lot of attention.” “That’s one way to say it,” Jassy began.

Jassy went on to explain the logic behind Amazon’s investment. He emphasized that AI is a “very unusual opportunity” to build a very large business, and that he is seeing clear and significant signs of demand for the services it is trying to build. “Just because we expect AI to grow significantly doesn’t mean we’re making a $200 billion capital investment,” he argued.

The CEO added that the faster AWS’s AI business grows, the more it will need to spend in the short term on data centers, power, construction, and land for the chips, servers, networks, etc. needed to run the AI. “Everything has to be planned out years in advance of when it’s time to monetize,” he said.

AI was not the only topic on the agenda during the meeting. Jassy also touched on Amazon’s drone deliveries, saying he expects the company to make its 1 millionth drone delivery later this year. Amazon’s drone, which can deliver shoebox-sized items to customers within 30 minutes, has been in development since 2013.

There was an update on Amazon’s physical grocery stores, Fresh and Go, which began closing in January. He explained that brick-and-mortar stores have not been as successful as expected, accounting for less than 1% of the company’s grocery sales last year.

Investors weren’t put off by Jassy’s comments, as Amazon’s stock price rose just over 1 percentage point that day.

Photo: SiliconANGLE