"According to CEO Andy Jassy (photo), virtually all new capacity added by AWS is immediately purchased by customers. The limitations are mainly on the supply side, such as available energy, hardware, and data center locations. Amazon has added nearly four gigawatts of additional capacity over the past year, underscoring the scale of its data center network. The ambition is to double this capacity again by the end of 2027."
"Growth is mainly driven by organizations that make intensive use of AI. They are increasingly moving their data, applications, and training processes to the cloud. Amazon expects AI to play a fundamental role in virtually all digital services and new AI-driven applications to quickly become standard. This development is causing a long-term shift towards cloud platforms such as AWS."
"The substantial investments do have an impact on financial ratios. AWS currently achieves operating margins of around 35 percent, but Amazon anticipates fluctuations due to a temporary increase in capital expenditure. However, the company states that these investments are not speculative. Amazon bases its expansion plans on concrete demand patterns and years of experience with capacity planning, with the aim of avoiding overcapacity and securing returns."
Amazon plans to invest around $200 billion by 2026, with AWS receiving the majority of that capital. Rapid AI application growth has increased structural demand for computing power, creating supply-side constraints such as energy, hardware, and data-center locations. AWS added nearly four gigawatts of capacity over the past year and aims to double that capacity by the end of 2027. Organizations that heavily use AI are moving data, applications, and training to the cloud, driving a long-term shift toward cloud platforms. AWS currently delivers strong revenue and margins, though margins may fluctuate amid elevated capital expenditure tied to expansion.
Read at Techzine Global
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