Amazon Web Services Growth: Cloud Expansion and AI Risks

Amazon (NASDAQ: AMZN) reported a staggering $182 billion in revenue in the first quarter of 2026. While retail operations dominate its income, the market remains laser-focused on Amazon Web Services (AWS), the company's cloud division. AWS delivered a 28% year-over-year revenue surge, marking its fastest growth in over three years, contributing 59% of Amazon's total operating income. CEO Andy Jassy emphasized in his 2025 shareholder letter that "85% of global IT spending remains on-premises," underscoring the massive opportunity for cloud adoption. CFO Brian T. Olsavsky highlighted triple-digit AI revenue growth, reinforcing bullish sentiment around the company's strategic pivot.

AWS Backlog Surge: A Double-Edged Sword

AWS's $364 billion backlog as of March 31 rose 49% sequentially, excluding the 10-year, $100 billion Anthropic deal signed in April. However, it includes OpenAI's $138 billion commitment over eight years, reflecting the dominance of AI labs in cloud contracts. Yet, this reliance raises concerns: Anthropic and OpenAI collectively generated $72 billion in annualized revenue, with AWS commitments consuming 38% of their sales. Unaccounted spending with other cloud providers and operational costs further complicate the sustainability of these deals, casting doubt on AWS's future trajectory.

AI Investments and Financial Balancing Acts

■AWS's AI revenue is growing at triple-digit annual rates.

■OpenAI and Anthropic's commitments inflate AWS's backlog by 38% relative to their revenues.

■Unreported cloud spending and operational costs add complexity to deal sustainability.

■Profitability and durable business models for these AI firms remain uncertain.

Markets are likely to scrutinize the fulfillment of AWS's AI-driven growth strategy, particularly as OpenAI and Anthropic navigate public offerings valued over $1 trillion. This dynamic could ripple through indices like NASDAQ and Borsa Istanbul. Meanwhile, logistics indicators such as the Baltic Dry Index may reflect the broader economic implications of such high-stakes cloud infrastructure bets.