Amazon.com Inc. (AMZN) has always seen Amazon Web Services as its biggest growth engine, but CEO Andy Jassy now thinks the cloud business could become far bigger than anyone at the company previously imagined. During Amazon's second-quarter earnings call on Thursday, Jassy said AWS could eventually generate $1 trillion in annual revenue, more than doubling Amazon's earlier vision of the business as one capable of producing "a few hundred billion dollars" in annual sales.
That comment wasn't new financial guidance. Instead, it reflected Amazon's growing conviction that artificial intelligence is dramatically expanding the long-term cloud computing opportunity, and that AWS remains well positioned to capture it.
Amazon Sees A Much Bigger Cloud Opportunity
AWS generated $42.2 billion in second-quarter revenue, up 36.7% from a year earlier. At that pace, the cloud business is now generating revenue at an annual rate of roughly $169 billion. But Jassy suggested those numbers represent only a fraction of AWS's long-term potential.
"We long believed AWS could become a few hundred billion-dollar revenue business and now believe it'll be at least double that, and very possibly be a trillion-dollar annual revenue business for us in time," Jassy said during the earnings call.
Amazon believes that opportunity is growing because AI is increasing demand for far more than specialized AI chips. Companies deploying AI applications also need cloud infrastructure to store data, run databases, support AI agents and handle the computing tasks that surround AI models. As a result, Amazon said growth in AI workloads is increasingly driving demand for its traditional cloud services as well.
Jassy also argued that the cloud migration is still in its early stages. He noted that roughly 85% of global IT spending still happens inside companies' own data centers rather than in the cloud, adding that he expects that balance to reverse over the next 10 to 20 years as more businesses modernize their technology infrastructure.
The company also pointed to growing visibility into future demand. AWS ended the quarter with $496 billion in signed customer commitments, a figure Jassy said was growing at a triple-digit rate year over year, while adding that demand already lined up for 2028 is "striking."
Amazon Is Investing For The Next Phase Of Growth
If Amazon expects AWS to grow into a business of that scale, it also needs to build the infrastructure to support it.
The company raised its planned 2026 cash capital expenditures to approximately $220 billion, up from its earlier estimate of about $200 billion. Jassy said higher memory costs contributed to the increase, while emphasizing that Amazon still expects demand to exceed available capacity through both 2026 and 2027.
Despite the unprecedented investment, Amazon remains confident the economics will justify the spending. Jassy said servers typically recover their upfront cost in less than three years, while data centers can remain in service for more than three decades, allowing AWS to generate cash flow over many generations of computing hardware.
For investors, Jassy's trillion-dollar projection wasn't simply an ambitious long-term forecast. It reflected Amazon's belief that AI is fundamentally expanding the cloud computing market, not just shifting existing workloads into the cloud. If that view proves correct, AWS's next phase of growth could be significantly larger than even Amazon envisioned only a few years ago.
