Amazon AI Business Hits $25 Billion Run Rate: What It Means for the Stock

Amazon's (AMZN) AI business inside Amazon Web Services (AWS) has reached a $25 billion annual revenue run rate, growing at triple-digit percentages year over year.

This is a significant milestone for the company, and it's not surprising that the segment is accelerating. AWS itself grew 37% year over year to $42.2 billion in the second quarter, with operating income reaching $16.6 billion, up about 64% from last year.

The demand for AWS services is strong, with a backlog of contracted work reaching $496 billion in the quarter. This backlog alone is close to three times a full year of AWS revenue.

If the AI business doubles just twice more by 2031, it would take the line from $25 billion to about $100 billion of annual revenue. Considering the rest of AWS could reach between $250 billion and $390 billion by then, the segment alone could produce around $140 billion of annual operating income.