Amazon CEO Andy Jassy says he has a secret weapon in the AI wars

CEO Andy Jassy talked up Amazon’s investments in AI during Amazon’s third-quarter earnings call.

Amazon CEO Andy Jassy on Thursday explained why he thinks the company is well-positioned to excel in AI: Amazon Web Services.

Jassy talked up the cloud-computing unit on Amazon’s third-quarter earnings call, defending the company’s aggressive investments in AI. Amazon beat Wall Street’s third-quarter expectations on revenue and earnings per share, with the stock rising 6% in after-hours trading.

With Amazon expecting around $75 billion in capital expenditures this year, most of which will go toward AWS, Jassy told analysts that the company has an edge in AI because of its experience building a huge cloud-computing business.

“I think one of the least-understood parts about AWS over time is that it is a massive logistics challenge,” Jassy said, explaining that the company has learned how to successfully plan for capacity at its data centers worldwide.

Jassy said managing the data centers to avoid outages while ensuring efficient resource use is challenging, but that Amazon has developed sophisticated models to anticipate how much capacity is needed.

“I think that one of the differences — if you were able to get inside of the economics of the different types of providers here — is how well they manage that utilization and that capacity,” he said. “It has a very direct impact on what kind of margins you have over time and what kind of capital efficiency you also have over time.”

Jassy said the company’s AI business is growing three times as fast as AWS’s was at this stage — saying it was a “multibillion-dollar” business and was growing by triple-digit percentages year over year.

Companies that aren’t already storing their data in the cloud are moving to do so, Jassy said, because it’s “harder to be successful and competitive in generative AI if your data is not in the cloud.” That’s a boost for AWS, too, he said.

Amazon is among the Big Tech companies that Wall Street has scrutinized for major AI spending, with questions about when the investments will start to deliver meaningful returns.

Just this week, Meta flagged “significant capital expenditures growth” in 2025 as it works to build out its AI infrastructure, among other projects. Alphabet, also, has said it’s plowing money into building out AI. CEO Sundar Pichai said in August that the “risk of underinvesting is dramatically greater than the risk of overinvesting.”