AWS growth hits 39% as Amazon’s AI spending pushes cash flow negative

Amazon’s cloud business accelerated sharply, but the cost of the AI infrastructure race is now visible in cash flow. AWS revenue rose 39% year over year to $46.0 billion, its fastest growth in nearly five years, while AWS operating income climbed to $17.8 billion.

Across Amazon, quarterly sales reached $201.9 billion and operating income hit a record $28.1 billion. The tradeoff was much heavier investment: trailing 12-month free cash flow fell from a $14.8 billion inflow a year earlier to a $42.4 billion outflow. Amazon said the change was driven mainly by a $94.8 billion year-over-year increase in property and equipment purchases, primarily for artificial intelligence.

The company still expects roughly $220 billion in cash capital expenditure for the year. CEO Andy Jassy said AWS could grow more than 40% in each of the next two years, while Bedrock usage is expanding quickly among large companies.

For the AI market, the result shows both sides of the hyperscaler boom: demand for cloud AI is accelerating, but the data centers, chips and power needed to serve it are consuming cash at an extraordinary rate.

Update: On the earnings call, Jassy said Amazon intends to sell Trainium chips to customers outside AWS late next year. Revenue commitments for both Trainium and Graviton are up more than 20-fold, inference already accounts for well over half of AWS AI revenue, and custom-silicon customers saved more than $2 billion in the quarter. Amazon also expects to spend meaningfully more on capital expenditure next year than the roughly $220 billion planned for this year.