Amazon Web Services, the cloud infrastructure service from Amazon, is on track to record its strongest year of growth in three years. This surge is fueled by the artificial intelligence industry’s unprecedented demand for computing power.
AWS is growing at twenty percent year-over-year. The business ended the third quarter with thirty-three point one billion dollars in sales through the first nine months of the year, as announced in Amazon’s third-quarter earnings release. The segment’s operating income also increased to eleven point four billion dollars in the third quarter, up from ten point four billion at the same point in 2024.
Andy Jassy, the president and CEO of Amazon, stated that AWS is growing at a pace not seen since 2022. He noted the company continues to see strong demand in AI and core infrastructure and has been focused on accelerating capacity. Amazon added more than three point eight gigawatts of capacity in the past twelve months. During the quarter, AWS also launched a new infrastructure region in New Zealand and has three more regions in development.
The cloud provider secured several new deals in the third quarter across various industries, including notable names in the AI market. In July, AWS partnered with Perplexity to launch that AI browser company’s enterprise product. AWS also partnered with Cursor during the same period.
The intense infrastructure demands of AI have also benefited AWS’s competitors. Reports indicate that OpenAI and Oracle inked a massive three-hundred-billion-dollar cloud compute deal in September, which will start in 2027. The pair also made a separate deal for OpenAI to pay Oracle thirty billion dollars a year for data center services. Last week, Google and Anthropic announced a cloud deal worth tens of billions of dollars.
These enormous deals are occurring despite some skepticism about how much cloud infrastructure will actually be needed in the future and whether the industry is heading into a bubble. However, it makes sense for cloud companies like AWS to take advantage of a market where customers are willing to pay large sums for their services.
Andy Jassy commented on the company’s strategy, saying you will see Amazon continue to be very aggressive in investing in capacity because of the visible demand. He stated that as fast as the company is adding capacity, it is monetizing it.
This news about AWS growth comes just two days after Amazon announced it was cutting fourteen thousand corporate jobs as part of a move to invest more heavily in its AI strategy.