AWS will become a trillion-dollar business, Jassy says. But first, it costs a lot of money.

Andy Jassy has made it public that he believes AWS has the potential to become a multi-trillion dollar business. He reiterated this ambition during Amazon’s quarterly earnings call on Thursday.

“What we’re building at Amazon is unlike anything we’ve ever seen before. There’s never been a business with $1 trillion in annual revenue before,” he said.

But before the cloud business gets there, Amazon will need to increase capital spending to build the necessary infrastructure to support its blossoming business.

“While we still expect cash capital expenditures to be approximately $220 billion (most of AWS) in 2026, we expect more meaningful spending in 2027 with a clear goal of achieving financial returns,” Jassy disclosed on Thursday.

Amazon’s large investment in building AI infrastructure has been a continuing concern for investors this year. Indeed, during Thursday’s conference call, Wall Street analysts repeatedly asked Jassy to explain spending, signs that growth will indeed occur, and expected profit margins.

Jassy told them all the money was put to good use as the e-commerce giant planned to take advantage of a historic moment in global cloud demand driven by AI. AWS revenue increased 39% year-over-year, marking the sixth consecutive quarter of steady growth.

And the CEO predicted a 40% increase not only next year, but also in 2028, on a conference call.

“AWS is a $184 billion annual revenue business, and yet the opportunity remains extraordinary,” the CEO enthused. “With our continued pace of innovation, new core and AI capabilities, companies wanting to run their core and AI workloads on AWS, and the amount of capacity we are adding each year, we believe AWS has the potential to grow by more than 40% in 2027 and 2028 and become a $1 trillion business in revenue over the next five to 10 years.”

Jassy added that the company is “in the very early stages” of AI adoption in the enterprise, and so far “the strategy is working.”

Later, when asked why AWS’s growth required such a large investment, Jassy characterized the AI ​​boom as a “once in a lifetime opportunity” and said that such a huge investment is now necessary and worth it.

“We will continue to invest to remain a leader,” he said. “We can fund this plan, and I think it’s going to change the scale of Amazon forever. It’s going to change our bottom line forever.”

However, investors remained concerned. Shares fell about 6% in after-market trading Thursday.

The AI ​​boom is a pros and cons for the cloud industry because the AI ​​services that power it are supported by cloud infrastructure. Like Amazon, other cloud providers spend a lot of money, but they also make a lot of money. Microsoft, for example, just posted yet another record revenue growth, driven largely by its cloud business. It also ran out of bundles.