Amazon.com said that its cloud edge and aggressive build-out of new facilities is translating into a surge in its artificial intelligence business, with Amazon Web Services revenue up 28 per cent, its fastest pace since 2022.
Amazon.com, chief executive Andy Jassy said many customers building new AI agents want them stored where they already keep their cloud services and data, turning AWS into the place where everything gets bolted down.
Total revenue and profit rose in the first quarter, powered by AI services and cloud sales. Revenue climbed 17 per cent to $181.5 billion, while net profit jumped 77 per cent to $30.3 billion, which Amazon attributed to pretax income from its investment in Anthropic.
Both figures beat analyst estimates, according to FactSet, and shares rose more than four per cent in after-hours trading. Amazon forecast second-quarter revenue of $194 billion to $199 billion and operating profit of $20 billion to $24 billion.
Amazon says it added more server capacity than any other company in 2025 and promised to accelerate construction this year, which is handy because investors are counting the receipts. Capital spending in the first quarter was $43.2 billion, mostly on AWS and generative AI, with around $200 billion planned for the full year, a 60 per cent rise from 2025.
Free cash flow for the 12 months ended in March fell to $1.2 billion, down from $25.9 billion in the year-earlier period.
Jassy said Amazon will keep spending to meet demand for AWS data centres and services, arguing that the cash is going to customers already waiting in the queue.
It helps that the AI hype is running into real-world shortages, with demand for chatbots and other AI tools outpacing that for chips and storage, leading to outages and higher prices. Amazon is leaning on its cloud lead to host model builders and push a range of AI products via its Bedrock service.
In his annual shareholder letter on 9 April, Jassy said AWS’s AI business would bring in $15 billion this year if it maintains the first-quarter pace. On Tuesday, Amazon said customers will be able to access OpenAI’s latest models after the startup revised the terms of its partnership with Microsoft.
Last week, Amazon said it would invest up to $25 billion in Anthropic, while Anthropic said it would buy up to $100 billion in AWS services. In a separate agreement, Meta said it would use millions of Amazon’s Graviton processors to power its next generation of AI products.
Annapurna’s Trainium 2, Graviton and Inferentia chips are getting the hard sell, with demand for Graviton spiking. “It’s quite possible we’ll sell racks of them to third parties in the future,” Jassy said.
Amazon’s online stores business grew 12 per cent as it continued spending on faster delivery, including $4 billion to bring two-day shipping to rural areas. The company said Prime Day is being dragged forward to June from July.
In February, Amazon surpassed Walmart to become the largest US company by revenue, as it piled into speedier delivery and new categories such as luxury goods and cars. It is rolling out delivery centres meant to ship items in 20 minutes while investing in humanoid robots and aerial drones, with around 30 million customers expected to have access to drone delivery by the end of the year.
Amazon is even throwing elbows in the commercial space race, buying satellite operator Globalstar for nearly $11 billion and lining up its Leo satellite internet service for a mid-year launch. So far it has deployed 270 satellites and permission to launch more than 7,000, then went and banked a surprise box office hit with “Project Hail Mary” at nearly $615 million in global ticket sales.
