AWS revenue growth hits fastest pace in 18 quarters

Amazon said Amazon Web Services recorded its fastest revenue growth in 18 quarters during the second quarter, driven by rising demand for artificial intelligence services and continued expansion of its core cloud infrastructure.

Chief Executive Officer Andy Jassy said AWS revenue increased 36.7% year on year, taking the cloud business to an annualised revenue run rate of USD $169 billion.

Amazon also reported that its custom chips business reached an annual revenue run rate of more than USD $25 billion, while its AI business also exceeded a USD $25 billion annual revenue run rate. The company said both businesses are growing at triple-digit year-on-year rates.

AWS said demand continues to span AI workloads alongside traditional cloud services, with each contributing to growth in the other.

"Our Chips business now has an annual revenue run rate over $25 billion, growing triple-digit percentages year over year. Our AI revenue run rate climbed significantly quarter over quarter and is now also over $25 billion, growing triple-digit percentages year over year," said Andy Jassy, Chief Executive Officer, Amazon.

AI demand

Jassy said AI training and deployment are increasing demand for core cloud infrastructure, including compute and storage.

He said post-training workloads, reinforcement learning and AI agent operations rely heavily on CPUs rather than AI accelerators. Amazon believes this strengthens demand for its Graviton processor family.

The company also pointed to increased demand for storage and vector databases as organisations deploy more AI applications.

Jassy said AWS continues to position its cloud infrastructure alongside AI services, arguing that customers prefer to keep AI inference workloads close to their existing applications and enterprise data.

"Customers choose AWS because we offer the broadest capabilities, they want their AI inference to reside near their other applications and data - and more of it resides in AWS than anywhere else, and because AWS has the strongest security and operational performance," said Jassy.

Platform expansion

Amazon said organisations increasingly want to develop their own AI models using proprietary data, creating demand for managed AI development platforms.

The company said SageMaker AI supports customers building foundation models, while Amazon Bedrock provides managed inference services and access to multiple AI models alongside governance and security controls.

Amazon also expanded Bedrock AgentCore, a managed service designed to provide infrastructure for AI agents. The platform now includes policy controls, payment capabilities, web search integration and development tools intended to simplify deployment of production AI agents.

Amazon said businesses are also adopting managed AI agents for specific workloads, including software development, customer service and enterprise automation.

Its Kiro coding assistant recorded usage growth of three times quarter on quarter, according to the company.

Enterprise tools

Amazon highlighted continued investment in enterprise AI assistants through Amazon Quick.

The service enables employees to search information, automate workflows and manage tasks across email, calendars, cloud storage and enterprise software platforms.

During the quarter, Amazon added autonomous background agents, a personalised activity feed and 16 additional software integrations, including Adobe, Moody's and Snowflake.

The company said organisations including 3M, Allianz, AstraZeneca, Autodesk, BMW, Exxon, Finra, Hyundai, Intuit, Mondelez, Moody's, the NBA, the NFL, New York Life Insurance and Southwest Airlines are using Amazon Quick.

Amazon also reported continued growth in Amazon Connect, its cloud contact centre platform, and AWS Transform, which automates software migration.

Security focus

Amazon introduced AWS Continuum, a security service that uses AI to identify, prioritise, validate and recommend fixes for software vulnerabilities.

The platform analyses existing vulnerability backlogs, scans applications using frontier AI models and evaluates business context to determine which issues require immediate attention.

AWS Continuum also validates findings in sandbox environments before recommending remediation actions.

"It's hard to talk to with enterprises about AI right now without their mentioning security, and we expect Continuum to grow quickly," said Jassy.