AWS grows 39% as Amazon's quarterly AI spending hits $75.9 billion

Amazon reported on Thursday, October 29, 2026 that sales at Amazon Web Services (AWS), its cloud computing business, grew about 39% year on year to roughly $46 billion in the July-September quarter, the unit's fastest growth in nearly five years. The company's total revenue rose 12% to $201.9 billion, slightly below analysts' estimates, and earnings of $1.89 a share missed forecasts of $1.97. Amazon also spent $75.9 billion in cash on capital projects in the quarter, mostly AWS and artificial intelligence (AI) infrastructure, and its shares fell in after-hours trading.

Cloud computing means renting computing power, storage and software over the internet instead of owning servers. AWS is one of the largest cloud providers in the world, so its growth rate is a direct measure of how fast businesses are moving their work, and especially their AI projects, onto rented infrastructure. Growth of about 39% for a business of this size shows that demand for AI computing has not slowed.

The results also show the cost of meeting that demand. Capital expenditure, or capex, is money spent on long-lasting assets such as data centres, chips and power equipment. Amazon spent $75.9 billion in cash in a single quarter, and one analysis put its free cash flow, the cash left after these investments, at about minus $33.5 billion for the quarter. Investors reacted to that trade-off: strong cloud growth today, but heavy spending that will only pay off if AI demand keeps rising for years.

For businesses, including Indian companies that run on cloud platforms, the numbers point in two directions. More capacity should make AI tools more available and, over time, cheaper to use. But heavy investment by a few large providers also concentrates computing power with them, which shapes pricing and bargaining power for customers. For Indian IT services firms, which help clients move to the cloud and build AI systems, strong AWS growth signals continued demand for that work.

The quarter also confirms a wider pattern seen in results from other large technology companies this month: cloud businesses are growing fast on AI demand, while investors are increasingly asking when the spending will turn into profit.

Short-term: Amazon's shares fell after the results as investors weighed the earnings miss and spending. Customers can expect AWS to keep adding AI computing capacity.

Long-term: If Jassy's forecast of more than 40% AWS growth in 2027 and 2028 holds, the heavy spending could pay off; if AI demand slows, the company would be left with large, costly capacity. Either way, the race among cloud providers to build AI infrastructure is likely to intensify.

Who is affected: Businesses that rely on cloud services; AI start-ups that rent computing power; Indian IT firms that build cloud and AI systems for clients; chip and power-equipment suppliers; and Amazon's investors.

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