Amazon chief executive Andy Jassy has set out one of the most ambitious targets in the technology industry: he believes Amazon Web Services could become a business generating $1 trillion in annual revenue within the next five to 10 years.
AWS currently runs at roughly $184 billion in annualized revenue, so hitting that mark would require more than a fivefold increase. According to an analysis by The Motley Fool, the case for that growth rests not only on artificial intelligence but on a much older shift: companies moving their computing systems off their own hardware and into the cloud.
Most IT Spending Still Sits Outside the Cloud
Jassy's argument starts with how much computing has yet to move. By his estimate, around 85% of global IT spending still goes to infrastructure that companies own and operate themselves, while only about 15% happens in the cloud.
He expects that ratio to reverse over the next 10 to 20 years. Large organizations such as banks, retailers and manufacturers still run critical systems on older equipment, and migrating them is complex work.
For those that make the move, the potential payoff includes lower infrastructure costs, more flexibility and quicker access to newer tools. That gives AWS a path to new customers that does not depend on the AI cycle.
AI Adds a Second Engine of Demand
Artificial intelligence is the other major driver. Building and running AI systems requires large amounts of specialized chips, storage, networking and software, much of which AWS sells as a service.
Amazon also sees an advantage in consolidation. A company that already keeps its data and business applications on AWS may find it simpler to build and deploy AI tools in the same environment rather than moving workloads elsewhere.
The combination means traditional cloud migration and AI workloads could feed each other, giving AWS two overlapping sources of growth rather than reliance on a single trend.
Recent Results Show Accelerating Growth
The latest numbers suggest momentum is building. In the third quarter, AWS revenue rose 39% from a year earlier to $46 billion, its fastest pace of growth in nearly five years.
AWS also reported a backlog of $578 billion, representing contracted business that has not yet been recognized as revenue. That figure points to demand that extends beyond early-stage AI experiments.
A backlog is not the same as guaranteed revenue, however. Amazon must still build enough capacity to serve those contracts, and customers have to actually use the services they have committed to.
The Math Behind a Trillion Dollars
Getting from about $184 billion to $1 trillion is a steep climb. Doing it in five years would require growth of roughly 40% a year, while a 10-year timeline would need annual growth of about 18%.
Management has said it expects AWS to grow by more than 40% in both 2027 and 2028. Sustaining that pace for longer would be difficult, as competition may intensify, customers may push harder on costs and some companies may split workloads across several cloud providers.
Heavy Spending Backed by Strong Profits
Expansion on this scale is expensive. Amazon expects capital expenditures of about $220 billion in 2026, with most of that directed at AWS, and management has signaled a meaningful increase in 2027.
AWS is already highly profitable, which helps fund that buildout. Third-quarter operating income for the unit climbed 56% to $17.8 billion, an operating margin of 38.7%.
That profitability means AWS is paying for its own growth from an established base rather than spending in anticipation of demand that has yet to appear.
What the Target Signals for the Cloud Market
Jassy's goal is a forecast, not a certainty, and execution on data center capacity, pricing and customer retention will determine whether it holds up. Still, it frames AWS as a company with a longer runway than one tied to a single technology wave.
For businesses weighing their own infrastructure plans, the message is that the largest cloud provider expects on-premises computing to keep shrinking for years. For startups building on or competing with AWS, it signals continued heavy investment in capacity and an aggressive push to keep enterprise data and AI workloads on one platform.
Source: The Motley Fool
