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Amazon Bets Big on AI as Jassy Targets Trillion-Dollar AWS and Alexa Gains New Shopping Powers
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Amazon is accelerating its push into artificial intelligence across both its cloud computing and consumer businesses, with chief executive Andy Jassy reaffirming his ambition for AWS to become a trillion-dollar revenue business. Speaking on the company's quarterly earnings call, Jassy laid out aggressive growth targets for the cloud unit while Amazon simultaneously rolled out more than 100 new AI-powered shopping capabilities for Alexa ahead of the holiday season. The twin announcements underline how central AI has become to the company's strategy on both the enterprise and retail sides.
AWS is currently running at an annualized revenue rate of $184 billion, and its revenue rose 39% year over year β the sixth consecutive quarter of steady growth. Jassy said no business has ever generated a trillion dollars in annual revenue, describing what Amazon is building as unprecedented. He argued the unit can grow by more than 40% in both 2027 and 2028 and reach the trillion-dollar mark within five to ten years.
Reaching that goal will require enormous spending. Amazon still expects cash capital expenditure of roughly $220 billion in 2026, most of it directed at AWS, and Jassy said the company plans to spend meaningfully more in 2027. He added that Amazon has clear visibility into the financial returns on those investments, as analysts repeatedly pressed him on spending levels, growth signals and expected margins.
Jassy characterized the AI boom as a once-in-a-lifetime opportunity fueled by historic cloud demand, and said enterprise AI adoption remains in its very early days. He insisted Amazon can fund the plan, which he said will permanently change the company's size and revenue profile.
Investors, however, remained cautious, sending Amazon shares down about 6% in after-hours trading. The outlay mirrors moves by rivals, with Microsoft recently posting another record quarter driven largely by its cloud business while also spending heavily on AI infrastructure.
On the consumer side, Alexa users can now create, register, view and edit lists, adjust subscription deliveries, and update delivery instructions such as addresses or drop-off details. They can also ask about Prime or Audible subscriptions, billing and payment issues. The update builds on other tools Amazon introduced this year, including a shopping assistant in its search bar and alerts about new products and offers. Amazon said usage of its agentic features has grown eightfold since the start of the year, and that more than 400 million consumers have used Alexa for shopping over the past 12 months.
The coming holiday season will serve as an early test of whether those consumer features translate into sales, while the far larger wager remains the cloud build-out. How quickly AWS converts record infrastructure spending into revenue and margin will determine whether Jassy's trillion-dollar target is met β and whether investors stay patient through the bill.
