AWS Is Leaving Revenue on the Table Due to Power Shortages, Jassy Says

Amazon will continue to bet big on artificial intelligence (AI), Amazon CEO Andy Jassy said in a 2025 Letter to Shareholders posted Thursday (April 9).

Jassy said that while investment spikes invite scrutiny, AI is a game-changer that will reinvent every customer experience.

“I’ve followed the public debate on whether this technology is over-hyped, whether we’re in ‘a bubble,’ and if the margins and ROIC [return on invested capital] will be appealing. My strong conviction, at least for Amazon, is that the answers are no, no, and yes,” Jassy said in the letter.

Jassy said during a February earnings call that Amazon expects to invest about $200 billion in capital expenditures this year to add capacity for AI and core cloud workloads.

In Thursday’s letter, Jassy said AI is being adopted more quickly than any previous technology, Amazon Web Services (AWS) is in the middle of this “land rush” and is being selected by companies for AI, AWS could be growing even faster if it had more power capacity, and the company’s chips business will be much larger than most people think.

“Having our own hotly demanded chip opens up many possibilities, but perhaps none larger than the ability to lower costs for customers and secure better economics for AWS,” Jassy said. “At scale, we expect Trainium will save us tens of billions of capex dollars per year, and provide several hundred basis points of operating margin advantage versus relying on others’ chips for inference.”

Amazon’s annual revenue run rate for its chips business, which includes Graviton, Trainium and Nitro, is over $20 billion and growing triple-digit percentages year over year, Jassy said.

“If our chips business was a stand-alone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be ~$50 billion,” Jassy said.

Amazon has customer commitments that make its capex investments predictable, Jassy added.

“We are willing to make large capex investments and endure short-term FCF [free cash flow] headwinds for the substantial medium to long-term FCF surplus,” Jassy said. “AI is a once-in-a-lifetime opportunity where the current growth is unprecedented and the future growth even bigger.”

Outlining developments across Amazon’s businesses, such as retail, cloud computing services, advertising and autonomous ride-hailing service, Jassy said AI will play a role in all of them.

“Across all of this, AI is not a standalone initiative—it’s a multiplier,” Jassy said. “It will reshape every customer experience we offer and unlock entirely new ones.”