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Fox Business Alert, bears attacked Amazon after yesterday's disappointing quarterly results, but now they are gradually retreating in the last, say , 22 minutes of trading. The tech giant's shares previously fell to $229, but are now at $239 . Still a drop of about 1.67%. Despite everything, it was a truly painful 2 days , when the stock lost about 6% of its value.
But the real heavyweight in Amazon's reporting is Amazon Web Services, which reported sales growth of 39% year-over-year, reaching $46 billion. This is AWS's fastest growth in 5 years and its sixth consecutive quarter of growth with annual revenue of $184 billion. Here's what Amazon CEO Andy Jessee predicts for the cloud segment over the next decade.
With our continued innovation, new core and AI features, the desire of enterprises to run their workloads on AWS, and the amount of capacity we add each year, we believe AWS can grow by over 40% in 2027 and 2028 and become a trillion-dollar revenue business in the next 5–10 years. We are connected directly with Amazon Web Services CEO Matt Garman .
Matt, on a day when Amazon is "tossing and turning," you are, so to speak, that " bright streak" in the clouds. Tell me how important AWS is on a day like this to Amazon's overall performance . Well, AWS is an incredibly important part of Amazon, and we continue to be very optimistic about the growth prospects that you just heard about in Andy's talk .
The potential of this business is truly enormous, and looking ahead to the coming years, it's quite unusual to have a business the size of AWS, with $184 billion in annual revenue , growing as fast as we are. This is perhaps one of those unprecedented business opportunities. And when we think about the customers and the opportunities in front of us, we really see , as you mentioned, the opportunity for sustained growth both next year and the year after that , as we continue to scale.
So this is a really fantastic opportunity and we are incredibly inspired by it. It's exciting, but on a day like this, when you see the general investor sentiment around technology and everything related to AI , there comes a point when people start to wonder if something has changed in this area. I know you have a certain concentration of clients in the AI space.
Anthropic and OpenAI have committed to investing approximately one hundred billion dollars each? What will happen to your development if, for example, one of these two stumbles? I will tell you that we are in a very advantageous position when it comes to evaluating our customer base. In fact, it is very diversified.
We have a huge number of customers when we think about who will grow with us in the coming years and who is with us now. You mentioned OpenAI and Anthropic, they are our big customers, but really most of the business with us is spread across a number of enterprises and startups that run inference using these customers or models on Bedrock.
So the business is truly diversified: large financial institutions, healthcare companies, retail, startups— it spans different industries and the entire world. Therefore, we believe that our diversification is actually spread across a large number of clients. In fact, if you look at our backlog, we have over $280 billion in commitments, and only a small portion of that is for these AI labs.
Okay, that's exactly what I wanted to know, because people are watching OpenAI and Anthropic, maybe the government is preparing regulations, even though President Trump has said that the industry should regulate itself. You never know what will happen. Bedrock Business is your cloud service that enables customers to build and scale generative AI.
This is truly explosive growth. Tell us about the spending of Fortune 500 companies. That's very interesting, and that's why we're so optimistic about the potential for further growth. Bedrock has already become the fastest growing multi-billion dollar business we have ever launched in AWS history. It is growing at an astonishing rate, and if you look inside Fortune 500 companies, you can see only a small fraction of the potential of AI to transform their workflows and business opportunities .
We believe that all of them are only at the very beginning of this path. So when we look at the large companies choosing AWS—like ADP, Salesforce, organizations like NATO—we see that companies all over the world are trusting AWS with their workloads. And it's incredibly interesting, we're seeing that as they move more of their workloads and data to AWS, they're actually starting to use AI more.
And as they use more AI through Bedrock, they are actually moving even more of their workloads to AWS. So we see this really fascinating flywheel: the more basic loads they carry, the more it helps them use AI. We see this starting to develop, and that is what gives us such positive momentum for the future.
Well, yes, the momentum is indeed significant. I dare say, Matt, and while viewers can correct me if I'm wrong , I'm pretty sure I haven't, I've never heard of a trillion-dollar business inside another business. You are going to this. So at what point does it make sense to spin this off into a separate public company?
I mean, I know I ask you this every time, but we're getting close to that point, aren't we? Listen, and as I tell you all the time, we love being part of Amazon. We get many benefits from being part of Amazon. I think there is a real benefit to both the AWS business and the retail business, as well as digital and other Amazon businesses.
So we really enjoy being a part of this, and I think it benefits both our business and other divisions of Amazon. So there are no plans for that, and we are quite happy with what is an important and large part of Amazon. Yes, with the parent company. It's always convenient, but it's certainly a valid question.
I mean, you see how big it's getting, but as you continue to run this business, what's your next goal? What is your next point on the horizon that you really want to reach? Well, I'll tell you as someone who runs a business: our focus is only on how to help more customers move faster. When you dig into what the customer is actually getting, you see that they are transforming their business and their industry by moving to the cloud.
So we really believe that we don't want our customers or any customers at all to be left out of this digital transformation. So we see our work as helping them develop faster, and how can they use AI to move faster ? So, um, next month we're having our re:Invent conference. We think this is a great opportunity to bring customers together, talk about some of the new technologies and services we are creating, and how they can apply them to their businesses.
So when I think about milestones, it's really about the customer journey and helping them. You know, I think there are financial metrics, each of which is great, and we continue to set goals for our teams. So how do we grow to 200 billion? How do we grow to 300 billion? How do we grow to 500 billion?
Up to a trillion? But along the way, it's every client, big or small, and helping them is how we truly grow. Amazon is essentially looking everywhere and saying, "Well, you know, let's absorb everything." " Let's try to eat the world and take on a wide variety of businesses." We have already visited your low Earth orbit business, your LEO project in Seattle.
It's just fascinating. I want to move to your chip manufacturing business . Your Trainium chip seems to have 20 times more liabilities. People want this chip. How does this affect your relationship with Nvidia , which is in the same business? Yes, we have the same great relationship with Nvidia as always, and the good news is that the opportunities are so vast that not just one vendor, one chip, or one technology will help customers move where they want to go.
So we're seeing fantastic results from Trainium 3. It's a really great chip for AI, it delivers fantastic, industry-leading price-performance, and there are many use cases and scenarios where the latest chips from Nvidia are the best solution. In fact, we announced with Nvidia that we will deploy over 2 million Nvidia GPUs in the AWS cloud over the next 2 years.
So we are not slowing down our partnership in any way. In fact , we have become bigger partners with Nvidia than ever before. But we also think Trainium gives customers a very good choice, and we're very excited about this business and think it can become very big for AWS and Amazon. Again, this is a huge business.
Are you also becoming a chip manufacturing company ? We are actually a chip manufacturer. So, from regular processors to Graviton and Trainium—this is a really big and compelling reason why people choose AWS. This is our distinct advantage, and we are quite excited about it. Well, it was another pretty turbulent day, with stocks going up and down.
I want to point out to the audience that the stock fell 7% overnight, and is now down 1.6%—AWS is performing strongly, and we've already broken out of the low. Matt, good to see you. Thank you very much. Thank you for inviting me. Don't forget to like and subscribe to the latest Fox Business news on YouTube, and you can watch full episodes of the show on Fox.
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