Amazon’s cloud business is growing — and so is spending its capital

Amazon was one of several tech giants that on Wednesday beat Wall Street’s expectations for the first quarter, providing more evidence that the AI ​​boom continues to reward companies that provide picks and shovels.

Amazon’s cloud business is the latest example. Amazon Web Services, powered by its own work in promoting the AI ​​boomsaw its sales increase 28% year over year, rising to $37.6 billion, the company said Wednesday. It was AWS’ fastest growth in 15 quarters, Amazon President and CEO Andy Jassy said during the company’s earnings call.

Jassy said AWS’s success is part of its role in providing compute to the AI ​​industry.

“It’s very unusual for a business to grow this quickly.” The last time we saw growth in this picture, AWS was about half that size,” Jassy said. “We’ve never seen technology grow as fast as AI. Amazon is already a leader, and companies continue to choose AWS for AI.”

Jassy compared business growth to challenges. “To show our growth, three years after the launch of AWS, it had an investment of 58 million dollars. (During) the first three years of this AI wave, AWS’s AI investment exceeded 15 billion dollars – about 260 times larger.”

Even as money flows into its cloud business, Amazon is also spending heavily on the infrastructure that supports the cloud. Jassy said on Wednesday that the growth of investment funds will continue in the near future.

“The faster AWS grows, the more long-term capex we’ll have,” he said. “AWS has to invest in real estate, power, buildings, chips, servers, and network equipment, well in advance of when we can make money.”

Jassy positioned this investment as a short-term investment for long-term gains, noting that capital investments such as data centers that last more than 30 years or chips, servers, and communication equipment have a useful life of five to six years.

Jassy tried to allay investors’ fears that the e-commerce giant is spending too much on the economy. He also offered more than that kind of money would have for free travel.

“In a period of high growth like the current one – where capex growth exceeds revenue growth – in the early years, free cash flow is challenged,” he said.

Amazon’s first quarter earnings report shows the appeal of free cash flow. The company reported that free cash flow fell to $1.2 billion in the next twelve months, driven by year-over-year growth.
$59.3 billion in purchases of goods and equipment – mostly related to AI. That’s a 95% drop from the $25.9 billion in free traffic they had in the first quarter of 2025.

“We have gone through this market with a big start to the growth of AWS, and as a result. We expect to feel the same with the next wave that has a lot of money that can go down and free cash flow,” he added.

The e-commerce giant all salesmeanwhile, it rose 17% to $181.5 billion year-on-year. Sales grew 12% in North America and 19% globally, the company said.