Artificial intelligence is likely to help Amazon.com Inc.’s cloud computing business reach $600 billion in annual sales within the next decade, according to Amazon Chief Executive Andy Jassy.

The bold forecast came during an internal all-hands meeting with company employees today. Jassy provided employees with a comprehensive update on the state of the company’s businesses, including its drone deliveries, advertising sales and its nascent AI offerings.

According to Reuters, Jassy said that prior to the AI boom, he had envisioned Amazon Web Services Inc. becoming a $300 billion annual revenue run rate business within the next 10 years. “[But] I think with what’s happening in AI, AWS has a chance to be at least double that,” he said.

AWS still has a way to go, but the $600 billion number is not unrealistic. In fiscal 2025, AWS booked $128.7 billion in revenue, up 19% from the year before. To reach Jassy’s new target, the business would need to grow its sales at a rate of 17% annually for the next decade, so it seems doable. Jassy did not discuss how those sales might be distributed across the AWS unit.

The cloud computing division has long been Amazon’s most profitable business. Its high-margin, scalable cloud infrastructure contrasts considerably with the low-margin, high-logistics cost of its e-commerce business, and has allowed it to consistently contribute the bulk of Amazon’s total operating profit. In fiscal 2025, it represented about 70% of the company’s total operating income, despite generating only 17% of its total revenue.

Jassy’s comments may help to reassure jittery investors, who have become increasingly wary of the company’s ambitious spending plans. Earlier this year, the company committed to investing $200 billion in capital expenditures in fiscal 2026, with most of that money earmarked for AI data centers. It’s thought to be the main reason why Amazon’s stock is down more than 6% in the year to date.

During the meeting, Jassy took part in a question-and-answer session with employees, where one noted that the company’s expenditures have “received a lot of attention.” Jassy began his response by saying, “That’s one way of putting it.”

Jassy went on to explain the logic behind Amazon’s investments. He stressed that AI represents a “very unusual opportunity” to build an extremely large business, and that he has seen clear and significant demand signals for the services it’s trying to build. “We’re not just spending $200 billion of capex because we’re hoping AI is going to be big,” he insisted.

The CEO added that the faster AWS’ AI business grows, the more it has to spend in the short term on land for data centers, power supplies, building construction and the chips, servers and networks needed to run AI. “We have to lay all that out a couple of years in advance of when we’re ⁠going to monetize,” he said.

AI wasn’t the only topic on the agenda during the meeting. Jassy also discussed Amazon’s drone deliveries, and said he expects the company to make its 1 millionth drone delivery later this year. Amazon’s drones, which can deliver shoebox-sized items to customers within 30 minutes, has been under development since 2013.

There was an update on Amazon’s Fresh and Go physical grocery stores, which began shutting down in January. He explained that the brick-and-mortar stores hadn’t been as successful as hoped, accounting for less than 1% of the company’s grocery sales in the last year.

Investors weren’t turned off by Jassy’s comments, as Amazon’s stock gained just over a percentage point today.

Photo: SiliconANGLE