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id="main" class="site-main" role="main"> <div class="article-wrap"> <article id="post-1462097" class="post-1462097 post type-post status-publish format-standard has-post-thumbnail tag-earnings observer_company-amazon observer_company-amazon-web-services channel-business channel-artificial-intelligence channel-technology nyo_person-andy-jassy" data-post="" data-title="Amazon CEO Andy Jassy Assures Investors Expensive A.I. Infrastructure Is Worth It" data-url="" data-page-url="/2024/11/amazon-earnings-aws-profit-surge/" data-date="2024-11-01 14:07:43" data-date-iso="2024-11-01T14:07:43-04:00" data-author="Aaron Mok" data-coauthors="Aaron Mok" data-channels="Business, Artificial Intelligence, Technology" data-piped-channels="Business|Artificial Intelligence|Technology" > <header class="entry-header"> <div class="entry-teaser"> <a href="https://observer.com/business/" aria-label="Read more articles on Business">Business</a><span>  •  </span><a href="https://observer.com/technology/" aria-label="Read more articles on Technology">Technology</a> </div> <h1 class="entry-title" itemprop="headline">Amazon CEO Andy Jassy Assures Investors Expensive A.I. Infrastructure Is Worth It</h1> <h2 class="dek">Heavy investments in A.I. infrastructure like data centers are “useful assets” that will operate for 20 to 30 years, CEO Andy Jassy said.</h2> <div class="entry-meta nyo-social-comments nyo-social-comments-above"> By <span class="author" itemprop="author"><a rel="author" class="url fn n" href="https://observer.com/author/aaron-mok/" title="View All Posts by Aaron Mok">Aaron Mok</a></span> • <span class="entry-date"><time itemprop="datePublished" datetime="2024-11-01">11/01/24 2:07pm</time></span> <svg aria-hidden="true" style="position: absolute; width: 0; height: 0; overflow: hidden;" version="1.1" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"> <defs> <symbol id="icon-envelope" viewBox="0 0 28 28"> <path d="M26 23.5v-12c-0.328 0.375-0.688 0.719-1.078 1.031-2.234 1.719-4.484 3.469-6.656 5.281-1.172 0.984-2.625 2.188-4.25 2.188h-0.031c-1.625 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During the July-September quarter, AWS generated $27.5 billion in revenue, up 19 percent from a year ago, and projects to generate $110 billion in revenue for the full year. AWS’s profits grew 48.6 percent to $10.4 billion, making up the majority of Amazon’s total operating income following North American retail sales. Amazon’s total revenue jumped 11 percent to $158.9 billion, exceeding Wall Street’s estimates. </span></p> <section class="wp-block-observer-newsletters observer-newsletters--in-content"> <form class="newsletters-block__container" method="post" action="#" id="newsletter-6742bc542cd6f1.03225482" data-form="subscribe-newsletter" data-recaptcha-key="6LexvRggAAAAAF1HvCWrHtG4UAa7m0WIdyIgstAo" data-form-action="https://observer.com/newsletter-subscribe.json"> <div class="observer-newsletters__in-content-icon"> <svg fill="none" xmlns="http://www.w3.org/2000/svg" viewBox="0 0 51 51" width="50" height="50"><path d="M18.124 15.961C23.25 8.783 30.096 4.967 33.682 7.305a4.04 4.04 0 0 1 1.013.97c0 .028 8.3 16.017 8.3 16.017l4.634 2.989a6.39 6.39 0 0 1 1.793 1.732c.472.684.798 1.45.96 2.253.161.804.154 1.63-.02 2.432a6.075 6.075 0 0 1-.995 2.24l-.209.291c-.977 1.355-2.475 2.288-4.17 2.598a6.827 6.827 0 0 1-4.883-.943L32.662 48.32c-1.095 1.285-3.197 2.564-5.792 1.059a3.834 3.834 0 0 1-1.15-1.093 3.63 3.63 0 0 1-.587-1.444 3.763 3.763 0 0 1 .008-1.55 3.85 3.85 0 0 1 .635-1.427l6.556-9.208s-15.5-1.174-15.557-1.196a3.812 3.812 0 0 1-1.35-.552c-1.842-1.19-2.502-3.688-1.865-7.035.573-3.082 2.2-6.572 4.564-9.914Zm29.349 19.182.208-.292c.334-.467.567-.992.687-1.545a4.09 4.09 0 0 0 .012-1.678 4.18 4.18 0 0 0-.665-1.555 4.407 4.407 0 0 0-1.239-1.193l-4.002-2.592-5.282 7.405 4.002 2.592a4.64 4.64 0 0 0 1.624.655c.581.114 1.18.119 1.764.013a4.65 4.65 0 0 0 1.634-.631 4.42 4.42 0 0 0 1.257-1.179Zm-20.03 9.809a1.96 1.96 0 0 0-.324 1.528c.108.53.433.998.904 1.3.472.302 1.05.413 1.608.31A2.158 2.158 0 0 0 31 47.23l7.42-10.405-2.983-1.93-.788-.06-7.205 10.117Zm7.832-12.009 5.757-8.072-5.491-10.657c-.533 2.993-2.091 6.55-4.582 10.04-2.49 3.49-5.386 6.18-8.108 7.758l12.424.931ZM18.188 31.66c2.768-.171 7.275-3.143 11.092-8.497s5.056-10.42 4.205-12.94a2.354 2.354 0 0 0-.877-1.185 2.55 2.55 0 0 0-1.44-.47c-2.746 0-7.42 2.989-11.347 8.497-2.212 3.099-3.823 6.34-4.263 9.175-.863 5.42 2.63 5.42 2.63 5.42Z" fill="#000"/><path d="M25.364 16.165a5.726 5.726 0 0 1 2.148.01c.708.14 1.38.412 1.976.8.11.073.204.166.276.272a.941.941 0 0 1 .14.73.947.947 0 0 1-.158.347.998.998 0 0 1-.285.263 1.047 1.047 0 0 1-.767.133 1.046 1.046 0 0 1-.364-.15 3.572 3.572 0 0 0-1.25-.503 3.648 3.648 0 0 0-1.355-.01 3.574 3.574 0 0 0-1.257.486c-.381.238-.71.546-.966.906s-.436.763-.528 1.189a3.152 3.152 0 0 0-.01 1.29c.086.427.26.834.51 1.197.25.363.574.675.952.92a.972.972 0 0 1 .382.48c.07.194.074.405.01.602a.969.969 0 0 1-.37.49 1.048 1.048 0 0 1-.601.186 1.026 1.026 0 0 1-.58-.165 5.305 5.305 0 0 1-2.01-2.363 4.999 4.999 0 0 1-.29-3.028 5.165 5.165 0 0 1 1.527-2.67 5.592 5.592 0 0 1 2.83-1.412h.04Zm-8.491-6.914h-.098c-.25 0-.493-.088-.679-.248a.95.95 0 0 1-.329-.617l-.782-7.234a.919.919 0 0 1 .21-.725c.083-.1.188-.185.306-.247a1.05 1.05 0 0 1 1.14.105.974.974 0 0 1 .36.668l.776 7.24a.933.933 0 0 1-.222.707c-.17.199-.414.325-.682.351ZM3.771 7.763c.149-.214.38-.363.644-.414.264-.052.538-.002.764.138l7.06 4.41a.974.974 0 0 1 .396.482.922.922 0 0 1 .014.611.969.969 0 0 1-.376.496 1.05 1.05 0 0 1-.613.182 1.07 1.07 0 0 1-.58-.155l-7.06-4.41a.961.961 0 0 1-.415-.622.928.928 0 0 1 .166-.718ZM1.61 19.54l8.214-1.406c.265-.045.538.011.759.158.221.146.372.37.42.622a.93.93 0 0 1-.166.723c-.154.21-.389.354-.654.4l-8.207 1.405h-.18c-.258.007-.51-.08-.703-.243A.933.933 0 0 1 .97 19.88a1.03 1.03 0 0 1 .646-.358l-.005.017Z" fill="#000"/></svg> </div> <div class="observer-newsletters__in-content-inner"> <header class="newsletters-block__header"> <h2 class="newsletters-block__title"> Sign Up For Our Daily Newsletter </h2> </header> <div class="newsletters-block__form"> <input type="hidden" name="action" value="subscribe_newsletter"> <input type="hidden" name="newsletters[]" value="newsletter-daily" id="newsletter-daily"> <div class="newsletters-block__fields wp-block-button"> <input class="newsletters-block__input" aria-label="Email Address" placeholder="Email Address" type="email" name="email" required=""> <button class="wp-block-button__link in_article_single_newsletter_button" type="submit"> Sign Up </button> </div> <p class="newsletter-block__success"> Thank you for signing up! </p> <p class="newsletter-block__error"></p> <p class="newsletters-block__disclaimer"> By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. </p> </div> <a href="https://observer.com/subscribe/" class="newsletters-block__see-all in_article_single_newsletter_see_all_link"> See all of our newsletters </a> </div> </form> </section> <p><span style="font-weight: 400">“The AWS team continues to make rapid progress in delivering A.I. capabilities for customers and building a substantial A.I. business,” Amazon CEO <a href="https://observer.com/person/andy-jassy/" title="Andy Jassy" class="company-link">Andy Jassy</a> said on an earnings call yesterday (Oct. 31).</span></p><div data-ad="1" class="ad-wrapper ad-top-margin ad-has-disclaimer ad-incontent ad-mobile htlad-observer_article_instream_mobile_1" id="observer_article_instream_mobile_1"></div><div class="ad-wrapper ad-top-margin ad-desktop ad-has-disclaimer ad-incontent htlad-observer_article_instream_dsk_1" id="observer_article_instream_dsk_1"></div> <p><span style="font-weight: 400">AWS’s revenue boost was driven, in part, by the cloud provider’s latest agreements with several major companies, including Capital One, Sony, T–Mobile, and Toyota as customers seek additional compute power to run their power-intensive A.I. workloads. AWS customers now have access to the latest foundation models in Amazon’s generative A.I. platform Bedrock, including Claude 3.5 Sonnet and Meta’s Llama 3.2. Customers also have access to custom silicon chips like the Graviton and Trainium through the cloud. </span></p> <p><span style="font-weight: 400">In addition to updated A.I. capabilities for enterprises, Amazon launched a slate of new generative A.I. tools for consumers. In October, Amazon launched a new line of Kindle e-book readers with an A.I.-powered notebook app that can summarize pages of books in bullet points, as well as A.I. Shopping Guides, a tool online shoppers can use on Amazon’s website to find the right products. A month prior, the tech giant launched Project Amelia, an A.I.-assistant sellers can use to answer questions about their inventory, sales and customer traffic. </span></p> <p><span style="font-weight: 400">“In the last 18 months, AWS has released nearly twice as many machine learning and genAI features as the other leading cloud providers combined,” Jassy said. </span></p> <p><span style="font-weight: 400">Still, investors questioned when AWS will see a return on investment. Amazon spent $69.75 billion on property and equipment, a 27 percent jump from the $54.73 billion it spent over the same period last year. Amazon projects to spend a total of $75 billion in capital by the end of 2024, the majority of which will go to AWS’s A.I. infrastructure like chips and data centers, and expects to spend even more in 2025, according to Jassy. </span></p><div data-ad="1" class="ad-wrapper ad-top-margin ad-has-disclaimer ad-incontent ad-mobile htlad-observer_article_instream_mobile_2" id="observer_article_instream_mobile_2"></div><div class="ad-wrapper ad-top-margin ad-desktop ad-has-disclaimer ad-incontent htlad-observer_article_instream_dsk_2" id="observer_article_instream_dsk_2"></div> <p><span style="font-weight: 400">The CEO assured investors that AWS is expanding at a “very rapid rate” and must continue to invest in A.I. hardware to meet growing customer demand. Heavy investments in infrastructure like data centers, he adds, are “useful assets” that will operate for 20 to 30 years.</span></p> <p><span style="font-weight: 400">“I think we’ve proven over time that we can drive enough operating income and free cash flow to make this a very successful return on invested capital business,” Jassy said in response to questions around Amazon’s heavy spending. “We expect the same thing will happen here with generative A.I.” </span></p> <p><span style="font-weight: 400">It’s not just Amazon’s cloud unit seeing growth. Sales from Amazon.com grew 7 percent to $61.41 billion, and sales increased 8 percent across its physical stores. Amazon’s advertising services, too, jumped 19 percent to $14.3 billion following the release of ads on its streaming service Prime Video. </span></p> <p><span style="font-weight: 400">Looking ahead, Amazon will continue to expand its A.I. offerings. Jassy teased new robotics capabilities to automate shipping and packaging across its fulfillment centers and hinted at generative A.I. capabilities coming to its A.I.-home assistant Alexa. </span></p><div data-ad="1" class="ad-wrapper ad-top-margin ad-has-disclaimer ad-incontent ad-mobile htlad-observer_article_instream_mobile_3" id="observer_article_instream_mobile_3"></div><div class="ad-wrapper ad-top-margin ad-desktop ad-has-disclaimer ad-incontent htlad-observer_article_instream_dsk_3" id="observer_article_instream_dsk_3"></div> <p><span style="font-weight: 400">“I think that the next generation of these assistants and the generative A.I. applications will be better at not just answering questions and summarizing, indexing and aggregating data, but also taking actions,” Jassy said. </span></p> </p> <img itemprop="image" src="https://observer.com/wp-content/uploads/sites/2/2024/11/GettyImages-1245247316.jpg?quality=80&w=970" alt="Amazon CEO Andy Jassy Assures Investors Expensive A.I. Infrastructure Is Worth It" style="display:none;width:0;"> </div> <footer class="entry-meta"> </footer> </article> <div class="breadcrumbs"> <span class="before-text"> Filed Under:</span> <a href="https://observer.com/business/" aria-label="Read articles filed under Business">Business</a>, <a href="https://observer.com/artificial-intelligence/" aria-label="Read articles filed under Artificial Intelligence">Artificial Intelligence</a>, <a href="https://observer.com/technology/" aria-label="Read articles filed under Technology">Technology</a>, <a href="https://observer.com/person/andy-jassy/" aria-label="Read articles filed under Andy Jassy">Andy Jassy</a>, <a href="https://observer.com/tag/earnings/" aria-label="Read articles filed under Earnings">Earnings</a>, <a href="https://observer.com/company/amazon/" aria-label="Read articles filed under Amazon">Amazon</a>, <a href="https://observer.com/company/amazon-web-services/" aria-label="Read articles filed under Amazon Web 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