AWS growth and capacity
Q: Justin Post with Bank of America asked about the factors driving AWS growth acceleration despite a sequential slowdown and how the company plans to manage capacity adds in Q4.
A: Andy Jassy highlighted that 39.3% growth on a $184 billion run rate is exceptional, driven by the full AI stack and custom chips. Brian Olsavsky added that fuel and linehaul costs are expected to be higher in Q4 compared to Q3.
Long-term AWS strategy and robotics
Q: Brian Nowak with Morgan Stanley asked for the rationale behind the $1 trillion revenue target and inquired about key robotics milestones for 2027.
A: Andy Jassy explained that the $1 trillion target is supported by visibility into large capacity commitments and the early stage of enterprise AI adoption. Regarding robotics, Jassy noted that with over 1 million robots already deployed, the company aims to further automate repetitive tasks to improve safety and cost structure.
AWS margins and grocery strategy
Q: Mark Mahaney with Evercore ISI asked about the stability of AWS operating margins and the impact of perishable grocery delivery on Prime household spend.
A: Brian Olsavsky noted that while AWS margins are strong, they face pressure from the mix of AI growth and component pricing. Andy Jassy explained that perishables are a critical driver for grocery relevance, noting that customers using same-day delivery for perishables buy 7x more everyday essentials.
Bedrock and custom silicon strategy
Q: Eric Sheridan with Goldman Sachs asked about learnings from the Bedrock service and the strategic balance of selling Trainium chips externally versus internal use.
A: Andy Jassy stated that customers prefer a broad selection of models, positioning Bedrock as a massive opportunity. He explained that selling chips externally involves a trade-off between immediate revenue and the long-term cloud revenue generated by using those chips internally, with external sales planned for late 2027.
Capital expenditure and infrastructure returns
Q: Doug Anmuth with JPMorgan asked about the CapEx required to sustain 40% growth and the expected duration of returns on servers and data centers.
A: Andy Jassy acknowledged that the required CapEx is meaningful but necessary to lead in a once-in-a-lifetime transformation, adding that the company is actively working to shorten the breakeven period on its infrastructure.
AWS margin structure and inference
Q: Ross Sandler with Barclays asked how the shift toward inference-as-a-service, largely running on Trainium, might impact AWS margins.
A: Andy Jassy explained that running on custom chips provides structural cost advantages and that the company's strategy of owning or long-leasing data centers, rather than relying on colocation, supports better operating margins.
