Amazon – AI and Beyond

Amazon’s cloud business, AWS, generated $128.7 billion in revenue last year. By offering enterprises on-demand IT resources over the internet on a pay-as-you-go basis, AWS has become a cornerstone of modern digital infrastructure. In the age of generative AI, Amazon is expanding AWS’s capacity to meet rising demand, with $130 billion in capital expenditure last year directed not only toward compute power but also toward strengthening its logistics network for ecommerce.

Looking ahead, Amazon has announced plans to spend $200 billion in capital expenditure in 2026, with the bulk of that investment expected to go into data centres. Alongside this, the company is increasing spending on its own AI chips, robotics, and low Earth orbit satellites.

While AI and cloud investments dominate headlines, Amazon’s other businesses continue to deliver impressive results. Net sales and services excluding AWS revenue reached $426 billion in America, up 10% year over year, and $161 billion internationally, up 13%. These segments span retail, logistics, advertising, and more. Considering the already massive scale of Amazon’s operations, such growth is rare. Even more striking is the improvement in operating margins for the non-AWS businesses, rising from 2.5% in 2023 to 5.8% in 2025; a strong performance for a retail-driven model.

Overall, Amazon generated just under $80 billion in operating income last year, a 16% increase from the prior year. AWS still accounts for 57% of that total, underscoring its role as the company’s profit engine. Yet profitability in Amazon’s non-AWS segment has been increasingly driven by advertising. Revenue from advertising surged to $68 billion in 2025, up from just $19 billion in 2020. While Amazon doesn’t disclose operating income for this segment, advertising is widely considered a high-margin business, suggesting it plays a critical role in lifting overall profitability.

Amazon’s heavy focus on AI reflects both the promise and uncertainty of this emerging technology. But beyond the cloud and AI narrative, the company’s retail, logistics, and advertising arms continue to grow steadily, reinforcing the idea that Amazon is not defined by a single business line but by a diverse ecosystem that keeps expanding.