Amazon Web Services (AWS), the cloud computing arm of Amazon, is on track for its strongest year of growth in three years, driven by surging demand for cloud infrastructure from the AI industry. In its third-quarter earnings report, Amazon revealed that AWS generated $33.1 billion in revenue for the first nine months of the year, marking a 20% year-over-year increase. The segment’s operating income reached $11.4 billion in the quarter, up from $10.4 billion during the same period in 2024. Andy Jassy, Amazon’s president and CEO, highlighted the momentum, stating, “AWS is growing at a pace we haven’t seen since 2022, re-accelerating to 20.2% YoY.” He attributed the growth to robust demand in both AI and core infrastructure, noting that AWS has been rapidly expanding its capacity—adding more than 3.8 gigawatts of computing power in the past 12 months. The company launched a new infrastructure region in New Zealand during the quarter and has three additional regions in development, further strengthening its global footprint. AWS also secured several high-profile deals in Q3, including a partnership with Perplexity to launch the AI-powered browser company’s enterprise product in July, and a collaboration with the AI coding platform Cursor. The AI boom has not only benefited AWS but also its cloud rivals. In September, OpenAI and Oracle reportedly agreed to a massive $300 billion cloud computing deal set to begin in 2027, with OpenAI also paying Oracle $30 billion annually for data center services. Just last week, Google and Anthropic announced a cloud agreement worth tens of billions of dollars. Despite concerns about whether the cloud infrastructure market could be entering bubble territory, the current spending spree reflects strong confidence in AI’s long-term trajectory. Companies like AWS are seizing the opportunity to scale aggressively, knowing that demand is translating directly into revenue. “We’re going to continue to be very aggressive in investing capacity because we see the demand,” Jassy said. “As fast as we’re adding capacity right now, we’re monetizing it.” This growth comes just two days after Amazon revealed plans to cut 14,000 corporate jobs as part of a broader strategy to reallocate resources toward AI innovation and long-term growth.