• AWS revenue grew 28% – it's now a fifth of Amazon's total revenue
• Industry partnerships and in-house chips are impressing customers
• Capex will remain high during the "early years" of the AI boom

Amazon revenues are up 17% year-over-year to $181.5 billion, largely driven by a 28% year-over-year growth in AWS revenue to $37.6 billion, with the cloud business now accounting for around one-fifth of the company's entire income.

In fact, this is the fastest growth rate in 15 quarters (nearly four years), and AWS' significant upward momentum was largely driven by continued enterprise spend on AI, with the business' AI services already at around $15 billion in annual revenue run rate.

Ongoing partnerships with the likes of Anthropic and OpenAI, including yesterday's announcement of an expanded partnership with OpenAI, only serve to strengthen AWS' position in the cloud market.

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AWS revenues continue to skyrocket

Despite a consistently high income, Amazon still plans to spend plenty of cash. Q1 capex hit as much as $44 billion, with the company planning around $200 billion throughout fiscal 2026 as it continues to invest in AI data centers.

"It’s very unusual for business to grow this fast on a base this large," CEO Andy Jassy said on the earnings call. "The last time we saw growth at this clip, AWS was roughly half the size." Compared with three years after AWS launched, when it had a $58 million revenue run rate, the business is now around 260x larger.

He described it as a once-in-a-lifetime opportunity to support long-term revenue, with this heavy upfront investment likely to pay off in the long run. A continued push to develop in-house chips is also designed to cut costs by reducing the reliance on Nvidia.

"The faster AWS grows, the more short-term capex we’ll spend," Jassy added, acknowledging that "free cash flow is challenged" in the "early years" and during times of high growth.

Looking ahead, the company predicts a further 16-19% increase in total revenue next quarter, though quite how much AWS will grow is yet to be seen.

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