Amazon’s cloud infrastructure service, Amazon Web Services (AWS), is on track to record its strongest year of growth in three years, fueled by unprecedented demand for computing power from the artificial intelligence industry.
AWS is growing 20% year over year and ended the third quarter with $33.1 billion in sales in the first nine months of the year, Amazon said. third quarter earnings announcement on Thursday. The business segment’s operating income rose to $11.4 billion in the third quarter, from $10.4 billion at the same time in 2024.
“AWS is growing at a pace we haven’t seen since 2022, accelerating again to 20.2% annually,” Andy Jassy, Amazon’s chairman and CEO, said in the company’s earnings release. “We continue to see strong demand in AI and core infrastructure and have focused on accelerating capacity — adding more than 3.8 gigawatts in the past 12 months.”
AWS launched an infrastructure region in New Zealand during the quarter and has three more regions in the pipeline.
The cloud infrastructure provider also secured several new deals in the third quarter across various industries, including some notable names in the artificial intelligence market. In July, AWS partnered with Perplexity to launch the company’s AI browser enterprise product. AWS also partnered with Cursor during the third quarter.
AI’s intense infrastructure requirements have also been a boon for AWS’ competitors. OpenAI and Oracle reportedly signed a massive $300 billion cloud computing deal in September that will begin in 2027. The pair also struck a deal for OpenAI to pay Oracle $30 billion a year for data center services. Last week, Google and Anthropic announced a cloud deal worth tens of billions of dollars.
These huge deals come despite skepticism about how much cloud infrastructure will actually be needed in the future and whether the industry is headed for bubble territory. However, it makes sense for cloud companies like AWS to benefit from a market where customers are willing to pay large sums for their services.
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“You’re going to see us continue to be very aggressive in terms of investment capacity because we see the demand,” Jassy said of investing in AI infrastructure. “As fast as we add capacity right now, we make money.”
This news comes two days after Amazon announced it was cutting 14,000 corporate jobs as it looks to invest more in its artificial intelligence strategy.
