Dive Brief:
- Amazon’s cloud revenues climbed 20% year over year to $33 billion in Q3 2025, according to a Thursday earnings report for the three-month period ending Sept. 30. The figure more than doubled Google Cloud’s roughly $15 billion in Q3 revenue reported this week, while Microsoft reported $49 billion in cloud revenue Wednesday for its Q1 2026.
- AWS’ operating income hit $11.4 billion compared with $10.4 billion year over year. Amazon said severance costs related to role eliminations were included in the figure for Q3.
- “We continue to see strong momentum and growth across Amazon as AI drives meaningful improvements in every corner of our business,” Amazon President and CEO Andy Jassy said in the earnings report. “AWS is growing at a pace we haven’t seen since 2022.”
Dive Insight:
AWS revenue growth comes at a time when CIOs are focused on cloud optimization and managing cloud spend, which could indicate IT teams are slowly changing budget priorities.
The hyperscaler’s 17.5% cloud revenue growth in Q2 revealed CIOs cutting cloud costs, Nick Patience, vice president and practice lead of AI platforms at the Futurum Group, said in an email to CIO Dive. But its 20% revenue growth in Q3 might indicate that IT executives are moving from a cost savings to a project investment mindset.
The higher quarter-over-quarter growth number is a “strong sign that new generative AI projects are finally outpacing the broad-based cloud cost-cutting trend,” he said.
Amazon’s CapEx totaled $34.2 billion in Q3, bringing total spend to $89.9 billion in 2025. AWS commands much of the spend, investing to support demand for AI and core services, including its custom AI chip Trainium, Amazon Senior VP and CFO Brian Olsavsky said during the Q3 earnings call. The company reported 150% growth quarter over quarter in its custom chip business.
Olsavsky said he expects the full year cash CapEx to total $125 billion by the end of 2025 and expects that amount to increase in 2026. The anticipated 2025 CapEx expenditures top Amazon’s previous estimates of $100 billion.
“We’ll continue to make significant investments, especially in AI, as we believe it to be a massive opportunity with the potential for strong returns on invested capital over the long term,” Olsavsky said, according to a Seeking Alpha transcript.
Cloud backlog grew to $200 billion by the end of Q3, with some unannounced deals pending, Jassy said.
The company also continues to accelerate capacity due to rising AI demand. Amazon reported adding 3.8 gigawatts of power over the last 12 months. Jassy said AWS has doubled its power capacity from 2022 and that it is on track to double it again by 2027.
“You’re going to see us continue to be very aggressive in investing in capacity because we see the demand,” Jassy said.
Q3 marks a significant inflection point for Amazon’s cloud AI narrative and demonstrates the company is serious about its cloud-AI convergence through its capacity expansion, custom hardware and new AI-enabled services, said Gartner Distinguished VP Analyst Jim Hare. However, he added, the “story ahead still has many moving parts.”
“The big question going forward is can the company sustain or accelerate this growth converting its massive infrastructure build out into higher margin revenue and outperform, or at least keep up, with other hyperscalers in the AI-driven cloud,” Hare said in an email to CIO Dive.
