Amazon continues to attract attention when announcing Q1 business results exceeding Wall Street's expectations, amid the wave of artificial intelligence (AI) strongly promoting core business segments, especially cloud computing.
The biggest growth driver comes from Amazon Web Services (AWS). According to the report, AWS's net revenue reached 37.6 billion USD, up 28% over the same period last year, the fastest increase in the last 15 quarters. This is considered clear evidence of the explosive demand for AI infrastructure globally.
Sharing at the business results announcement, CEO Andy Jassy said that AWS is playing a central role in providing computing capabilities for AI developers.
Mr. Andy Jassy emphasized that few technologies achieve such rapid growth as AI today, and AWS is directly benefiting from this trend.
To illustrate, Mr. Jassy compared: "In the first three years after its launch, AWS only achieved revenue of about 58 million USD per year. Meanwhile, in just three years of the current AI wave, AWS's AI-related revenue has exceeded 15 billion USD, hundreds of times higher.
However, this strong growth is also accompanied by great spending pressure. Amazon is stepping up investment in infrastructure to meet the increasing needs of customers.
Expenses include building data centers, purchasing servers, chips, network equipment as well as ensuring operating power supply.
According to Mr. Jassy, this is a long-term investment, as many assets such as data centers can operate for over 30 years, while servers and technology equipment have a lifespan of 5 to 6 years. However, in the short term, rapidly increasing capital spending is putting pressure on the company's cash flow.
Financial reports show that Amazon's free cash flow has decreased sharply, to only 1.2 billion USD in the past 12 months, down 95% compared to 25.9 billion USD in the same period last year. The main reason comes from spending up to 59.3 billion USD on assets and equipment, mostly related to AI infrastructure.
Faced with investor concerns, Amazon's leadership believes this is a familiar cycle. The company went through a similar period in the early years of AWS development and has achieved positive long-term results. With the current AI wave, Amazon expects revenue and cash flow potentials in the future to be even greater.
Besides AWS, Amazon's overall business operations still maintained stable growth momentum. Total quarterly revenue reached 181.5 billion USD, up 17% compared to the same period last year. In which, revenue in North America increased by 12%, and the international market increased by 19%.
It can be seen that Amazon is facing great opportunities from AI, but must also balance between growth and cost control. Maintaining strong investment in infrastructure will be a key factor determining the company's competitiveness in the global technology race.
