AWS on Pace to Hit $1 Trillion in Revenue Within Decade

Amazon's AWS division posted an impressive 37% year-over-year revenue growth last quarter, with its annual recurring revenue (ARR) reaching $169 billion. CEO Andy Jassy believes that this division can hit $1 trillion in revenue within the next decade.

The growth of AWS is fueled by increasing demand for cloud services and artificial intelligence spending. The company has partnerships with major AI labs, including Anthropic, which plans to spend tens of billions on cloud computing in the coming years.

Using historical data, analysts estimate that AWS can average 20% revenue growth during the next decade, bringing its ARR to $1 trillion by 2036. This would equate to operating earnings between $300 billion and $400 billion, depending on profit margins.

Jassy's revised estimate is a significant increase from his previous prediction of hundreds of billions in annual revenue for AWS. The company's cloud segment should lead to trillions in revenue and hundreds of billions in earnings power by the middle of the next decade.