Amazon reported third-quarter earnings, which showed a continued surge in AI infrastructure spending.
The company missed both top- and bottom-line estimates, with revenue of $201.9 billion and net income of $20.7 billion, which translates to diluted earnings of $1.89 per share. On average, analysts estimated $202.2 billion and $1.97.
Amazon's aggressive AI and data center build-out led to negative free cash flow of $42.4 billion over the trailing 12 months. On the post-earnings conference call, management said inference accounts for over half of AWS AI revenue as enterprises begin deploying the technology at scale.
The tech giant's AWS operating income was $17.8 billion, up about $6 billion from the same period last year.
"Our AWS investment in functionality and infrastructure is working, with over 39% year-over-year revenue growth in Q3 ($184 billion revenue run rate) and projected revenue growth rates of over 40% both in 2027 and in 2028,” CEO Andy Jassy said in the release. “There has never been a trillion-dollar revenue business, and we may have two of them in the next 5-10 years.”
Separately, Amazon has established an up to $80 billion supplier financing arrangement to borrow against the value of its hardware purchases. This helps preserve financial flexibility as it spends hundreds of billions on artificial intelligence infrastructure.
Earlier this month, Amazon was reportedly exploring a deal to transfer about $8 billion in Nvidia chips to outside investors in an effort to finance its AI infrastructure buildout.